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Mortgage – Should I Consider Changing?Written on July 13, 2017 by Kirk Rice LLP

Mortgage – Should I Consider Changing?
Financial Services Questions

The Question:

We have been with our existing lender for well over 10 years and the interest rate we are paying is their Standard Variable Rate which I always thought was good. However, I recently saw an advert for a mortgage that, on the face of it, seemed to be a lot lower. Should we consider changing; is it worth the hassle?

 

Kirk Rice LLP answers:

In our recent Spring 2017 Home Finance Newsletter we highlighted that the average Standard Variable Rate as at February 2017 was 4.56% and at the same time the average 2 Year Fixed Rate was 3.14% – a difference (saving) of 1.42%. Based on this, reviewing your mortgage would certainly appear to be sensible. Both of the rates quoted above are ‘average’ which means that for both examples, there will be rates that are lower (or indeed higher) and so a potential saving could be even greater. There is the hassle factor, but you can always get an adviser to review your mortgage and options for you. Yes, there will be a fee and there may also be the lenders fees payable, but part of the review will be to establish if there is an overall saving that can be made by changing, taking into account the costs.  Mortgage rates are at very low levels currently, and if you are concerned about them rising, you may want to consider a Fixed Rate mortgage to give you peace of mind. Fixed Rate periods could be anything from 2 years right up to 10 years.

Our Newsletter also highlighted some results from a study conducted by YouGov. It showed that just 28% of people with a mortgage switched provider to secure a more favorable interest rate at the end of their fixed rate deal. In comparison, 50% of people have switched their energy supplier; one could save hundreds of pounds, the other could save a few thousand. No prizes for guessing which one is the thousand.

Click here to use our FREE Mortgage Tools including a Mortgage Finder,Mortgage Best Buys and Mortgage Calculator.

We hope that this blog has been helpful in your query relating to mortgages but any reader interested in discussing this topic further can telephone Peter Sharratt on 01344 875000 or email info@kirkrice.co.uk

If you would like to receive Money Matters electronically, simply email info@kirkrice.co.uk stating Money Matters in the subject heading and we will add you to the distribution list.

Please note: answers are given for general guidance only and specific advice should be taken before acting on any of the suggestions made. The FCA does not regulate tax and trust advice.

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