One of the biggest mistakes homeowners make is assuming they should wait until their mortgage deal has almost finished before looking at their options. But lets look into when you should start, why you should start then and the benefits of doing so!
By the end of this chapter you’ll understand:
✓ When you should start reviewing your mortgage
✓ Why waiting until the last minute can reduce your options
✓ How securing a mortgage early works
✓ What happens if mortgage rates change
✓ Why planning ahead can give you greater peace of mind
Estimated Reading Time: 10 minutes
One of the biggest mistakes homeowners make is assuming they should wait until their mortgage deal has almost finished before looking at their options. In reality, many lenders allow you to secure a new mortgage several months before your current deal ends.
That means you don’t have to leave everything until the final few weeks. Starting early gives you time to:
Most importantly, it can help you avoid moving onto your lender’s Standard Variable Rate if your current deal expires before you’ve arranged your next one.
Why start early?
Starting early doesn’t mean your new mortgage starts immediately. Your existing mortgage continues exactly as it is until your current deal finishes. Instead, you’re simply preparing for what’s next.
This gives you time to compare products and secure a new rate without unnecessary pressure. For many homeowners, it also provides reassurance because they know their next mortgage has already been arranged.
What if mortgage rates change?
Mortgage rates move up and down throughout the year. No one knows exactly what they’ll do next. That’s why many homeowners like the reassurance of securing a rate as soon as they’re able. If rates increase after you’ve secured your mortgage, you already have a deal in place.
If rates reduce before your new mortgage begins, your adviser can review the products available and discuss whether switching to another suitable product is possible, subject to lender criteria and timescales. This approach gives you flexibility while helping protect you from unexpected rate increases.
There are many benefits to starting the process early, as we have previously mentioned, but let’s look at the one that matters most to you in more detail:
Potential Savings
Let’s imagine your mortgage deal ends in 6 months, currently the interest rate available on a remortgage is 4.50%. We don’t know what the product transfer rate is at this time because they are released once the window for completing the product transfer opens.
We secure the 4.50% rate for you now and we revisit when the product transfer window opens with your current lender. Within the 3 months following us securing your rate, there is uncertainty in the market, interest rates begin to rise and by the time the product transfer window opens, the rate is now sitting at 4.85%. You have saved money by doing it early, because the rate we secured at the start is still valid.
On the other hand, if we had secured the 4.50% rate and when we came to revisit the rates, they had dropped and were now sitting at 4.15%, then we can switch you onto the lower rate. This again, saves you money.
Regardless of what happens with interest rates, whether they increase or decrease, by securing it early you will save money. Whether that be by having a rate locked in that is lower than what is available or by having us monitoring the rates on your behalf so you know come the end of your current deal, you are in the best place possible.
It’s a win-win situation for you!
One of the biggest benefits of reviewing your mortgage early is peace of mind. At NHMB, we don’t just arrange a mortgage and forget about it.
If market conditions change before your new deal starts, we’ll review the products available and discuss your options with you. That way, you’re not left wondering whether you’ve missed out on a better deal.
Many homeowners assume they’ll automatically receive the best available deal from their existing lender.
While your lender may offer you a new product, it’s always worth comparing your options before making a decision.
✓ Starting your remortgage early gives you more time to plan
✓ Many lenders allow you to secure a new mortgage several months before your current deal ends
✓ Mortgage rates can change, which is why reviewing your options regularly is important
✓ Acting early can help you avoid moving onto your lender’s Standard Variable Rate.
✓ Planning ahead provides greater flexibility and peace of mind
Next Chapter →
Understanding Your Remortgage Options
In the next chapter, we’ll explain the different options available, the advantages and disadvantages of each, and how to decide which approach may be most suitable for your circumstances.
