Should You Remortgage During Covid?
Saving Money On Your Mortgage Bill During The Pandemic
Homeowners can cut the cost of their largest monthly bill by remortgaging. But how easy is this during the pandemic?
Controlling your monthly outgoings may be a top concern during the pandemic, particularly if you’ve lost any sort of regular income. Typically, the largest bill you’ll pay each month is your mortgage, so if you’re scrutinising your finances, then it makes sense to start here if you’re hoping to save money. But you might be wondering if it’s sensible or even possible to remortgage in the middle of the Covid-19 pandemic. This guide will answer your questions.
When your current mortgage deal comes to an end, your lender will switch you automatically to their standard variable rate, or SVR which is typically a higher interest rate than the average deal you can get. To avoid paying these expensive monthly costs, you can get a better rate by remortgaging. Depending on the products available at the time, you might opt for a fixed interest rate so that you can be certain what your outgoings are for a set period of time. Alternatively, you might choose a tracker mortgage which is linked to the Bank of England base rate, currently standing at just 0.1%. As this rate is historically low, it would certainly make sense to switch to a new deal at the moment.
A firm of conveyancing solicitors in Essex reveals that others may choose to remortgage during the pandemic to free up cash for home improvements, as changes to living arrangements are required. Otherwise, buy-to-let landlords are also remortgaging to strengthen their portfolios by freeing up money to be spent on deposits.
How Are Banks Reacting?
It is still possible to apply for a remortgage at this time, however, you should be aware that banks and other financial lenders have tightened up somewhat during the pandemic. Some mortgage products have been removed from the market, with Which reporting that at least 900 have been withdrawn, so there is less choice available for home owners.
It would be prudent to seek financial advice before committing to a new loan product. This will ensure that you’re made aware of the pros and cons for each mortgage solution available to you and your individual circumstances, which may have been affected by the pandemic.
How Long Will It Take To Arrange?
Covid-19 has created delays in many industries, and the banking sector is no exception unfortunately. Banks and lenders are extremely busy at the moment, working in restricted circumstances and dealing with heavier call volumes than usual. With this in mind, if you would like to remortgage, then it would be sensible to start the process as soon as possible. This way, you’ll be able to start saving money on your outgoings quicker than if you choose to delay.
If you’re not sure what your current mortgage position is, then find the latest correspondence or call your lender for clarification about your existing deal and when it will come to an end. This will help you to determine if there are better mortgage solutions available in the market that would allow you to reduce your payments during this uncertain time.