Borrowers advised to look for new deals 6 months early

beecher

http://www.ft.com/cms/s/0/1616b43a-f6b0-11dc-bda1-000077b07658.html?nclick_check=1

Brokers say borrowers now need to be looking for a new rate well before the end of their existing deal. Savills is recommending that clients start looking for new deals six months before their initial offer runs out, two months earlier than it had previously advised.

“Borrowers have no time to delay,” says Bien. “If you see a deal you like the look of, you should secure it immediately – otherwise you could miss out.”

Does this sound like good advice?

I intend to stay with my existing lender - Halifax as my mortgage is £42,000 with 14 years to go and the costs of remortgaging with another bank seem high. This on a LTV of around 30%. My rate ends in December - should I really be thinking of looking in June for a new deal?

minimike2

If you had asked people six months ago the same question they would have said no. I bet looking back they would now say they should have said yes....

I have many clients who have arranged deals already for mortgages coming to an end in July / August. Its down to the individual at the end of the day.

beecher

I suppose I just have to wait and see what the situation's like in the summer time then and decide then.

stoke_bishop

beecher wrote: »

http://www.ft.com/cms/s/0/1616b43a-f6b0-11dc-bda1-000077b07658.html?nclick_check=1



Does this sound like good advice?

I intend to stay with my existing lender - Halifax as my mortgage is £42,000 with 14 years to go and the costs of remortgaging with another bank seem high. This on a LTV of around 30%. My rate ends in December - should I really be thinking of looking in June for a new deal?

On a mortgage that size any 0.25% rise in interest rates is only going to cost you a tenner. It depends how tight your budget is. I would go on a tracker myself with a mortgage that small, especially as these have low arrangement fees. (I'm not an expert by the way). How the rates you'll get in December versus now will compare, who knows? I would imagine they'll be worse.

What product are you on post-December? If you revert to a favourable tracker then I would stick with it...

minimike2

Thing is though if you look back over recent months we have had base rate reductions of 0.5% and most lenders rates have increased by the same amount, giving a net difference of 1%. This is significant for most people - even £20 a month on a "small" mortgage.

I think this is why this suggestion may have come about, with fears that things are going to get worse before they get better.

beecher

stoke_bishop wrote: »

What product are you on post-December? If you revert to a favourable tracker then I would stick with it...

I would go onto the Halifax standard variable, presently at 7.25%. At the moment they're offering a 5 year fix with no fee at 6.64% or a term tracker with no fee at 6.84% so I'd probably go for something similar.

Had a look at my documentation and a 1% rise equates to less than £30, so I think that makes the decision for me - I just go with a fix or a lifetime tracker depending on how things look later in the year.

Thanks for that.

antiriad

I am in a somewhat similar situation. My fixed rate deal expires at the end of this month (4.39% - £540/month). Afterwards, I will be on a variable rate of base rate + 0.99% (currently 6.24% - £640/month).

None of the deals I've seen with my existing lender (A&L) seem that great (especially if/when the base rate drops... and the product fees). Plus they all revert to a higher variable rate at the end.

Anyway, my advice to myself has been to wait a while, am I being an idiot? :doh: