4 steps to remortgage smarter in 2024
Tips on how to navigate remortgaging your property in 2024.
Interest rates have been on a rollercoaster over the past year and there’s no guarantee that they’re coming down any time soon. In fact, 70% of Finder’s panel of experts don’t expect the base rate to fall until at least 20 June 2024.
If you’re one of the 1.5 million homeowners coming to the end of a fixed-rate deal this year, here are 4 steps to help you navigate remortgaging in 2024.
1. Know when your current deal ends
The first step is to find out exactly when you’re current mortgage deal comes to an end. If you’re currently on a fixed rate, you’ll be moved on to your mortgage provider’s standard variable rate – which is often significantly higher!
Your provider should send you a letter ahead of time to let you know which date this will happen and what rate you’re being moved on to. So it’s important to get your next deal lined up so that you can avoid moving on to that higher standard variable rate.
2. Start looking early
You don’t need to leave it until the last minute to start shopping around for deals. In fact, sometimes you can lock a deal in 3 to 6 months before your current deal expires.
There is a risk that better deals may emerge in the meantime. So check whether or not you can switch from your reserved deal to a new one. If you haven’t paid any fees upfront, this is often doable. Just make sure you check this is a possibility before you commit to anything.
3. Work out your LTV bracket
LTV – loan-to-value – is the ratio of the value of your property and the mortgage amount you’ll need to borrow.
Your LTV may have changed since the last time you took out a mortgage, as you will have been making repayments and the value of your property may have changed.
Why does it matter? Mortgage deals differ depending on what LTV bracket you find yourself in. Typically, the higher the LTV (90%), the higher the rate – and vice versa. The lower your LTV is, the more likely you’ll be eligible for lower rates.
If you’re looking ahead of time, and you’re on the cusp of an LTV bracket, work out whether it’s in your best interest to make some overpayments on your mortgage in order to move into the next bracket.
Just keep in mind that most fixed-rate deals have an early repayment charge, so make sure you are within the threshold allowed for overpayments. It’s also worth crunching the numbers to work out whether it will make a difference when it comes to the overall cost of your mortgage.
4. Compare mortgages deals
Once you’ve done the first 3 steps, then it’s time to compare mortgage rates from different providers. You can do this either by using a mortgage broker or doing it yourself.
Consider whether you want a fixed-rate term, and if so, for how long. Depending on your circumstances, you may want to look at a tracker mortgage.
It’s important to consider the overall cost of the mortgage, not just the rate. This means taking into account any fees, whether this be arrangement fees or early repayment charges.
About the author
Kate Steere is an editor at Finder.com, specialising in banking and fintech. She has previously written for The Motley Fool UK and Fitch Solutions, where she covered a wide range of personal finance topics and kept a close eye on market trends. Kate is regularly quoted in the national media about banking, fintech and mortgages.
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