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Mortgages: five reasons why you should sort yours NOW

english 1769732 640Good news: figures just out show that the number of mortgages in arrears is at the lowest level since the data was first collected in 1994. This is mainly thanks to the current bargain basement mortgage rates. But if you’re a homebuyer now is not the time to be complacent: you should sort out your mortgage to future-proof it.

Here’s why.
1. While mortgage rates are nice and low now that is unlikely to continue. At some point – possibly early next year – rates could start rising. That means that it’s time to get a good homeloan deal now.
2. If you’re on a standard variable mortgage rate (which unless you’ve got a fixed rate or another type of deal is probably the case) you should think about remortgaging now. If base rate went up by 0.25% next year then it could cost you an extra £25 a month if you’ve a £200,000 mortgage. That’s not a lot – but if in a year’ time rates are 1% higher than now that would be an extra £100 a month.
3. Currently, fixed mortgage rate deals are looking tasty. Nationwide Building Society has chopped the rate on its three-year fixed rate deal to 1.74% and that’s for buyers as well as remortgagors. And the fee of £999 is competitive too. What’s more, you can overpay up to 10% a year – that’s a good idea as the quicker you pay off a mortgage, the less interest you pay overall.
4. Remortgaging isn’t free – there will be an arrangement fee if you’re going for a fixed or other deal. But it isn’t expensive – often, the new lender will help or pay all your legal costs. A good mortgage broker (I’ve used London & Country in the past and they were great) will find the best deal for you.
5. With a fixed mortgage rate, obviously enough, the rate doesn’t move during the term of your homeloan. This makes it easy to budget as you know exactly how much you’ll pay each month. On the other hand, if variable rates fall, you could be out of pocket on a fixed deal as it will cost you to exit a deal early.

Give me a break...
Going to university? Time to start saving


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Wednesday, 24 April 2019