As 2024 unfolds, millions of borrowers are coming to the end of their fixed mortgage deals, and it seems that a small sigh of relief can be had. Several lenders are slashing their fixed-rate deals to keep in competition and although rates are still high, it is offering some small note of positivity about what may come as we get further into the year.
If you are one of the 1.6 million to renew this year, we understand that rates still aren’t where you would want them to be, and the prospect of transitioning to a higher rate may be a cause for concern. That’s why we have put together this guide to help you make the right decision for you and your finances.
Step 1 – Assess your Finances and Budget for Higher Payments
Understanding your finances such as your income, expenses, outstanding debts, and overall financial goals can help you to understand where adjustments can be made to free up finances for a probable increase in mortgage payments. Be prepared to dip into emergency funds or try to save one in the run-up to your term-end. This can help to cover unexpected expenses or income disruptions that could arise during your higher mortgage payments. It is also important to understand how the potential increase could disrupt your savings plan and reassess your budget accordingly.
Step 2 – Understand Your Current Mortgage Terms
It is important to understand your current interest rate when comparing mortgage rates, for you to understand how your monthly payments could increase. It is also important to make note of when your fixed-rate period ends, to give you plenty of time to secure a deal and avoid moving to expensive SVRs. Calculating your remaining loan balance will also be useful when comparing refinancing options as this determines how much you owe when you come to the end of your deal.
Step 3 – Evaluate Market Conditions
Keep a close eye on the current mortgage market conditions, as interest rates constantly fluctuate. Research and compare the available mortgage options to ensure you make an informed decision based on the current financial landscape. Remortgaging may be a way for you to potentially reduce your monthly payments. It is important to start well before your fixed-rate deal comes to an end, at least 6 months prior, as by doing this, if rates do rise, you will have secured a lower rate already, which your lender must honour, and you also have the option of switching to a lower deal if rates fall. It’s also important to be mindful of remortgaging costs and fees, which can include valuation, conveyancer, or lender agreement fees. Once these points have been covered, you can then calculate the potential increase in your monthly payments.
Step 4 – Decide Which Loan Terms are Most Suitable for you
At this point, it is important to figure out which type of mortgage is most suitable for you, at this stage in your borrowing journey. Fixed-rate mortgages offer the safety of paying the same amount every month, allowing you to budget, however, if rates drop significantly after you have started your term, you don’t have the option to switch without paying added fees. Variable and tracker mortgages offer the freedom of paying lower monthly instalments if the rate drops, but they don’t offer security against rate rises. It’s also important to consider the length of your mortgage. Shorter-term loans mean higher monthly payments and lower overall interest costs, whereas longer term will offer you lower monthly payments but a higher overall interest cost.
Step 5 – Seek Advice from a Professional Mortgage Advisor in Manchester
Before jumping into any new financial decision, it is important to seek advice from an
independent mortgage broker in Manchester like TaylorMade. We are a leading mortgage advisor in Manchester, covering the whole of the UK, and we provide personalised mortgage solutions, designed specifically for your needs and circumstances.
We provide all the advice you need to allow you to understand the intricacies of different mortgage options and provide guidance on market conditions, allowing you to make decisions that align with your financial goals.
TaylorMade: How an Independent Mortgage Broker in Manchester can Help
Contact your leading
mortgage advisor in Manchester today to see how the current market conditions will affect your borrowing and allow you to make an informed decision on a deal that’s right for you.
As 2024 unfolds, millions of borrowers are coming to the end of their fixed mortgage deals, and it seems that a small sigh of relief can be had. Several lenders are slashing their fixed-rate deals to keep in competition and although rates are still high, it is offering some small note of positivity about what may come as we get further into the year.
If you are one of the 1.6 million to renew this year, we understand that rates still aren’t where you would want them to be, and the prospect of transitioning to a higher rate may be a cause for concern. That’s why we have put together this guide to help you make the right decision for you and your finances.
