Mortgage Prisoners - stuck with it?

Mortgage Prisoners

Are you one of the mortgage prisoners ?

Remortgage Prisoners – Judging by the volume of re-mortgages completing it’s evident that many homeowners are currently benefiting from low mortgage interest rates. In addition, switching mortgage rates before being automatically moved to your mortgage providers reversion rate is very popular.

The government has said they will address the issue of mortgage prisoners. In fact, there are already provisions to allow mortgage lenders to reduce affordability checks for existing customers. Particularly where you have a good payment history and don’t want to borrow any more money.

Today’s stricter lending rules require borrowers to prove that they could afford repayments even if interest rates were to rise. This means that many homeowners who took out their mortgages under previous, less stringent rules don’t always meet the current conditions for taking out a mortgage.

Any help out there?

If you think you’re probably stuck with your current mortgage, and the deal you took at the start has expired, it’s likely you’re on your mortgage providers standard variable rate (SVR). Think again, you might not be stuck. There might be an opportunity to move your mortgage to a more competitive deal. And, given that MDFS don’t charge any fees for mortgage advice there’s no cost to find out if you might be able to make a saving. It’s time to break free from being one of the many mortgage prisoners.

Assuming you’re paying an average SVR of say 4.8%, while an average two year fixed rate is say 1.89% per cent, you could end up paying over twice as much in interest per month.

Reasons to remortgage

Assuming MDFS can help, and remember it costs nothing to find out. Here’s some reasons why you would want to remortgage:

  • Your current deal is about to run out, putting you onto the lender’s SVR
  • Your current deal has already run out, and you’re now paying at a higher rate
  • You want to consider a different type of mortgage, say a fixed, capped or tracker
  • You’re looking for some added flexibility, say the option of making over payments or even offsetting
  • The value of your home has risen significantly, so your loan to value will permit a much better deal

And here’s some reasons why you might not want to consider a re-mortgage:

  • You have a small mortgage balance, so any fees will wipe out any advantage
  • Your current mortgage may still have a penalty if you repay it early
  • Your loan to value is still high and new rates aren’t as competitive as you have
  • Your circumstances have changed making the idea of moving your mortgage non-advisable; we’ll always be transparent in this regard

If you think you’re a mortgage prisoner call MDFS today for a quick chat and the guarantee that at no time will we charge you a fee – this isn’t just a free consultation service, we just don’t charge fees for advice. Check out what the Money Advice Service has to say about remortgages.

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