Save £1,000 a year by switching your mortgage
More than £29bn-worth of mortgages in the UK are due to mature in October, providing many borrowers with the chance to save on repayments by switching to a new deal, said Yorkshire Building Society.
Analysis by the mutual shows those looking to remortgage this year could see their monthly repayments fall, especially if their property’s value has increased since they took out their current deal.
Access lower mortgage rates
For example, a homeowner in the North West who initially borrowed 90% of the property’s value on a £250,000 property in 2019 could now benefit from a reduced loan-to-value ratio of 80% when remortgaging. This is due to house prices in the region increasing on average by 13% over the last two-years.
Switching from an average fixed rate of 2.66% on a two-year deal at 90% LTV in 2019 to the Yorkshire’s current two-year fix of 1.85% for borrowers with 80% LTV could save almost £1,000 a year in repayments.
Increase your mortgage
Those who want to make home improvements could borrow more money to make their dreams a reality, and still pay less than their current 90% LTV monthly repayments of £1,028.
In this situation a borrower could use the increased house value to add £10,000 to the mortgage and still benefit from an 80% LTV product. At the same rate of 1.85% it would mean monthly repayments of £991 over the remaining term of the mortgage, £37 a month less than their existing mortgage payment, with cash available for home improvements.
Ben Merritt, senior mortgage manager at Yorkshire Building Society, said: “With such a large proportion of mortgage deals maturing later this year it’s set to be a busy autumn as borrowers look to renew their home loans.
“Mortgages are likely to be one of the biggest financial commitments homeowners have, and undoubtedly some people will have found their circumstances or priorities have changed recently so the opportunity to remortgage may well be timely.
“With house price increases benefitting many parts of the country, borrowers could be pleasantly surprised with their new loan requirements. It could also be good news for homeowners who found themselves wanting to improve their home after spending so much time there in the last year. Raising additional funds as part of the remortgage to convert garages or landscape gardens may now be possible without much impact on the monthly mortgage payments they’re used to paying.”