MARTIN Lewis has revealed the exact time homeowners should look for a new mortgage deal following a hike in interest rates.
If you’re currently on a fixed mortgage, you could see higher rates when you come to the end of the current term.
ITVMartin Lewis has revealed the exact time you should look for a new mortgage deal[/caption]
Around 2.4million borrowers are due to come to the end of a fixed-deal between now and the end of 2024, according to UK Finance.
And if you’re nearing the end of a fixed deal soon, you may be wondering what you should do now.
The average rate on a two-year fixed deal has now soared to 6.19%.
And a typical five-year fixed deal has hit 5.82%.
A viewer called Nikki wrote in to This Morning to ask Martin Lewis if she should wait to secure a new mortgage deal before hers ends in December.
It comes after the Bank of England (BoE) increased its base rate by 0.5 percentage points last week to 5%.
Speaking on ITV’s This Morning today, Martin Lewis said households will soon be able to lock in a new deal up to six months ahead.
It as part of a new mortgage charter – a set of support measures for struggling borrowers – and it comes into effect on July 10.
They will also be able to lock in a new deal – without being tied in – and go for a better deal, if one is available, right up until their new term starts.
In response to Nikki’s question, Martin said: “One of the changes that was solidified last week is that from July 10 your existing mortgage lender will be able to offer you a new product six months in advance.
“And then, if that no longer is suitable for you once you get nearer the term, you can go and get another mortgage both with it – and if can offer you a better deal – or you can go and remortgage elsewhere.”
Martin added that you homeowners should be looking at what their existing lenders can offer, and get advice form a mortgage broker.
Under the new rules, borrowers will be able to ditch their deal without a penalty.
A number of lenders already allow customers to lock-in a deal up to six months before, including Leeds Building Society, Lloyds and Barclays.
But from July 10, all 31 lenders signed up to the mortgage charger will be have to offer this.
Sarah Coles, head of personal finance at Hargreaves Lansdown said this will “east some remortgage anxiety” for households.
You can see the full list here:
BarclaysNatWest, including RBS and Ulster BankLloyds, including Halifax and Scottish WidowsNationwide Building SocietyHSBC, including First DirectSantanderVirgin Money, including Clydesdale Bank and Yorkshire BankTSBScottish Building SocietyBuckinghamshire Building SocietyNewcastle Building SocietyHinkley & Rugby Building SocietyNottingham Building SocietyPrincipality Building SocietySuffolk Building SocietyWest Bromwich Building SocietyLoughborough Building SocietyFamily Building SocietyCoventry Building SocietyYorkshire Building SocietySkipton Building SocietyLeeds Building SocietyBath Building SocietyEcology Building SocietyThe Vernon Building SocietyLeek Building SocietyFurness Building SocietyMelton Mowbray Building SocietyGlasgow Credit UnionDarlington Building SocietyProgressive Building Society
But this only one part of a raft of support measures now outlined in the Mortgage Charter.
The scope of the agreement also means that any homeowner can approach their participating bank or mortgage lender for advice on repayments without impacting their credit score.
Homeowners will be able to change their mortgage to interest only and extend the terms of their loan, without it affecting their credit score.
This measure will also be introduced on July 10.
But if homeowners then want to go back to their original plan within six months they will be free to do so.
The new rules also say that a borrower will not be forced to leave their home without their consent unless in exceptional circumstances, in less than a year from their first missed payment.
This means homes cannot be repossessed if it’s been less than a since the homeowner made their first missed payment.
Banks and building societies have also been instructed by the government to deploy highly trained staff to help customers to ensure that tailored support is given to anyone struggling.
How to get the best deal when remortgaging
There are lots of factors to consider when searching for the best mortgage deals.
The amount you can borrow and interest rate are important factors but you should also consider the type of mortgage.
Do you want the certainty of a fixed-rate mortgage or the flexibility of a tracker that could get cheaper rates and doesn’t have exit fees?
There are mortgage calculators online that will let you compare the monthly cost of a mortgage based on the interest rate and any fees.
A lender or mortgage broker will be able to offer advice on the best type of mortgage deal to meet your needs.
Shop around for the best mortgage deals rather than opting for the first bank you see.
Remember a bank or building society will only offer its own options which limits your choice.
You can also use a comparison website to find deals across the market based on your level of deposit and whether you want a fixed or variable rate.
A comparison website will usually let you search for all types of home loans such as for first-time buyers or the best buy-to-let mortgage deals.
This will give you an indication of what is on offer but you will need to do the application yourself.
Some lenders may not be on comparison websites so it is worth searching directly online as well.
Alternatively, a mortgage broker can help search the market more widely and find the most suitable deals for you.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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