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Is the time right to be re-mortgaging your UK home loan?

With Reuters predicting that there is an 80% chance that the Bank of England’s Monetary Policy Committee is going to increase UK base rate again in November, and with many industry experts predicting that UK base rate is likely to reach 5.25% by end of first quarter 2007, many UK homeowners with variable home mortgage loans are starting to question whether or not the time might be right to jump ship and settle on a fixed rate UK home mortgage.

While the rate of interest currently being charged on your UK home mortgage is going to be a driving factor when it comes to deciding whether or not now is the right time to re-mortgage your UK home loan, many UK home loan borrowers appear to be failing to see that there may be other reasons why they would want to keep with the mortgage they have, rather than re-mortgaging simply to obtain a low rate of interest.

Among the main reason why it may be more practical for you to stick with your current UK home mortgage loan include the fact that most, if not all, UK fixed rate mortgages are for fairly short-term period. Once the offer period has expired, these mortgages then revert to the variable rate being offered by the lender, which may be higher than the current or projected rate being offered by your current home mortgage lender. Other good reasons why you should stick with your current UK home mortgage provider including the cost of having to make early repayment and the costs associated with re-mortgaging with a new lender, which may include costly survey and application fees. Although you may save over the lower interest fixed rate period, once you include these costs the overall savings to you may not make it such a financial incentive to move your UK mortgage to a new lender.

However, this is obviously subject to where variable home loan interest rates can go – and at least for the next 6 months things are not looking to good. As such, as Sean Gardner, from Money Expert, says: “It doesn’t hurt to have a look around, so research the market and challenger your lender to give you a better deal. If they don’t and you move, it’ll be their loss and your gain.”

That aside, although it is now much easier to re-mortgage your UK home loan than was previously the case, Sean Gardner’s comment that “So many people do the right thing by signing up to a cheap fixed rate when they first get their mortgage. But these deals expire and many will be stuck on expensive standard variable rates that hit your finances hard.”, should be a mantra that many thinking of re-mortgaging their UK home loans should certainly be bearing in mind.

Richard Smith
1st November 2006


More Information:

  • Mortgages
    If you are looking for a mortgage in today’s market place, you may well be completely bewildered by the wealth of options out there (there are around four thousand mortgage packages available at the moment!) but don’t panic.
  • Choosing The Right Mortgage
    The market is flooded with different types of mortgages, but how do you know which one is right for you? The decision has to be yours, whether you take advice from an Independent Financial Advisor or do your own research.
  • Different Types Of Mortgage
    Rather like a full house in poker there seems to be a wide selection of mortgages on the market, but aren’t many of them the same kind of product?
  • Don’t Forget The Extra Hidden Costs Of Getting A UK Mortgage
    For most of us, buying a new home is both one of the most exciting and stressful times of our lives. It goes without saying then that this is not a particularly good time to find out that you may be facing a bill of thousands of pounds in extra hidden costs for getting the mortgage to buy the UK property.
  • Home Loans
    Home or homeowner owner loans are a borrowing option open to most home owners. They are considered a secured loan, allowing the borrower to access some of the equity in their home.

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