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Switch your mortgage now while rates are still low

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28/07/2020
Mortgage rates are currently competitive but they're starting to inch up, so now could be the perfect time to remortgage
Switch your mortgage now while rates are still low

The average two-year fixed rate fell to an historic low of 1.99% this month, according to Moneyfacts.

However, the financial information provider urged those coming to the end of their current deal to remortgage quickly, as average rates have already begun to rise.

It also found that the current average standard variable rate (SVR) mortgage for July 2020, which those coming to the end of their initial term could now be facing, is 4.46%.

This means that those who fail to remortgage to a new deal could be paying 2.47% more than if they had switched to a new two-year fixed deal at the start of July.

Deal coming to an end?

The average two-year fixed rate at the start of July 2018 was 2.52%, which means that those who are now reverting to their lender’s SVR could be looking at a rate increase of 1.94% – or a £200 hike in their monthly mortgage repayments.

Eleanor Williams, finance expert at Moneyfacts.co.uk, said: “Considering current circumstances and the wide-spread concerns around household income many are experiencing at this time, this difference in payment could give an extremely welcome boost to monthly income.

“If those eligible to take the plunge and seek out a new deal need any further incentive, over the course of this month, we have seen the average rate for a two-year fixed deal begin to climb again.

“With the average SVR likely to remain more static moving forwards and the mortgage market itself remaining fluid, as lenders continue to amend their ranges in reaction to an ever-evolving landscape, there is no guarantee that rates will not continue to increase.”

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