For many people who are coming to the end of their fixed or tracker rate periods the mortgage landscape may seem to have changed beyond all recognition since the original loan was first taken out. For a good number, this will indeed be the case.
Quite apart from a tightening of criteria across the board, the scarcity of competitive products above 85% Loan-To-Value and headlines stating that mortgages are becoming scarce, you may find that the lender you took you mortgage with is now part of a different lender entirely with a whole new rulebook.
Add to this a debate as to the timing and the severity of the undoubted Base Rate rises to come and you can be forgiven for being a tad confused.
The good news is that things may not be as bad as they appear and there are still some highly competitive products around, including fixed rate products that are lower than they have been, or are likely to be, for a very long time. Many of these products also come with free valuations and free legals for remortgages if you know where to look.
I would always recommend that you do two things at this stage, usually around 3 months before your rate was to due to expire. Firstly, speak to your existing lender and find out exactly what options you have, then armed with this information approach an independent mortgage broker.
Trying to shop around not only for the best rates, but to find a lender that matches your current and future needs criteria wise is harder than it has ever been. A good broker will know the ins and outs of each lender, as well as have access to products that are only available through brokers.
It is the “advice” part which is important as many direct lenders just offer you a choice of products, without ensuring the product actually suits your needs not just now, but in the future, avoiding any nasty surprises later on.
Choose your next product very carefully as the next interest rate movement will be upwards. A low tracker product may be enticing but check you can still afford the loan if rates rise by at least 2% over the next couple of years.
Look for products with a “drop-lock” that enable you to benefit from a low variable rate now, with the option of switching to a fix without charge in the future.
A fixed rate will protect you in future and although you may lose some flexibility and pay a slightly higher rate to begin with, the peace of mind when rates do rise can ensure you do not suffer sleepless nights in the future.