London Remortgages Could Save You Money

The demand for London remortgages is rising as interest rates are set to increase over the next twelve months

. The reason some borrowers are looking to remortgage is to secure loans with favourable interest rates in a fixed term loan before the interest rates rise, but in the meantime borrowers could help their own cause by making overpayments on their London property. By making the most of the opportunity to overpay now, Londoners can look forward to a smaller mortgage debt, and less financial burden in light of economic uncertainty.

The interest rates are currently at an all time low of just 0.5%, but by the end of next year it has been predicted that the figure could rise to over 3%. This has the potential to have a big impact on monthly repayments for those with a tracker mortgage in London. Remortgages offer the opportunity to change to a fixed rate deal to avoid those increases in interest rates. Although fixed rate deals are perceived as the less risky option, this inherently means that the interest rates are higher.

Financial advisors are therefore urging borrowers with a tracker mortgage to make overpayments prior to changing to a fixed rate loan. Overpayments will not only help borrowers budget for an inevitably higher monthly repayment plan, it will reduce the mortgage debt in the meantime and give access to fixed terms with competitive rates. This is because making overpayment increases the amount of equity owned in the property, essentially resulting in a smaller loan when the time comes to remortgage.

As London properties are considerably more expensive than properties elsewhere in the UK, any opportunity to reduce the size of the debt is a welcome one. For home owners that are currently locked into a mortgage, it may be possible to pay a fee to sever the contract, although some mainstream lenders do not charge customers that decide to change to an alternative deal.

Advice about London remortgages is available from mainstream lenders and independent brokers. It is advisable to approach your own bank directly for advice, as there are specialist London remortgages available to existing customers that may not be advertised, or accessible through a broker. However, it is advisable to make an appointment with an independent mortgage broker too as they will have extensive information about the different deals available and may even be able to arrange a bespoke loan on a client's behalf.

by: Anna Stenning

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