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Mortgage comparison: now could be the time to switch

If you have had your mortgage for any length of time, you may benefit from changing to a better deal. Mortgage comparison sites enable you to get a feel for the different packages available and estimate how much you might be able to save by switching.

The amount you save will depend on a number of things. Although it can seem complicated at first, many sites have calculators that enable you to compare your current monthly repayments against what you would have to pay on a range of new deals. The most significant factor is likely to be the interest rate. This can make a substantial difference to your repayments. If you are stuck on a high rate – perhaps one that you arranged some time ago and have left alone ever since – then you should certainly consider looking around. Switching can save literally thousands of pounds.

One thing to offset this against is the potential cost of switching. A new mortgage often comes with an arrangement fee; alternatively, there may be a penalty for exiting your current mortgage before the end of the term. Although this might be worth it for the savings you will make over several years, this should be considered against the term of your new mortgage – many mortgages offer a lower rate for the first two or three years, and then revert to the lender’s higher rate after that.

Benefits of mortgage comparison

All the same, because many lenders only offer their best deals to new customers, it can often be worth switching. In addition, if you have had your mortgage for some time, you may be past the point at which there is a charge for changing it – you may already have had your two or three cheaper years and be on the more expensive rate already.

There may be other criteria you think are worthwhile pursuing, apart from the better rates. For instance, some mortgages allow you to put in more than the minimum monthly repayments, meaning that you can pay off capital faster and reduce the term. If your payments would go down as a result of a remortgage, you can put the extra money to good use in this way. If so, you will need to make sure that there is no penalty for overpaying.

You may discover that you already have the best deal for you – for example, you are on a tracker mortgage and interest rates are low, or if you are on a fixed-rate option and rates have risen since. All the same, it is worth bearing remortgaging in mind for the future. A mortgage is a long-term commitment, and things can change a lot over the course of the typical 25-year period. It is highly unlikely that it would be beneficial to remain with the same mortgage deal right the way through to the end of the term, and a little time spent looking at alternatives can save huge amounts of money over the years.

The Mortgage Broker

0800 822 3355

 

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