I haven't remortgaged because....

When was the last time you reviewed your mortgage rate? Is it still the right mortgage for you? And is your rate still competitive? Thousands of borrowers could save a lot of money on their mortgage but simply don’t get around to switching to a new deal. Here are some of the most common reasons people give for not remortgaging – and our reasons why you should (or at least review your rate).

What is a remortgage?

A remortgage is the process of moving your mortgage from one lender to another, while keeping the same property as security. You apply for a new mortgage and then pay off your existing one with the proceeds.

Reasons to remortgage are usually to save money by switching to a lower interest rate than you are currently on. You may be on a variable rate mortgage now and would prefer to switch to a fixed rate to give you some security.

It may also be a cost effective way of raising money by borrowing more and releasing some equity for your home.

I just don’t think about it

This is understandable as there are so many things to think about when it comes to your finances – nowadays you can switch almost any financial products and utilities such as your current account, broadband, gas, electricity and mobile phone tariff.

For a lot of people, these other things are seen as a higher priority when they review their finances, but in terms of the potential saving you could make, your mortgage should be at the top of the list.

A lot of other people are doing it too – according to figures from the Bank of England, around 340,000 remortgage loans were approved in 2012, so you shouldn’t miss out on getting a better mortgage deal. If you do you could be paying hundreds of pounds more a year than you need to.

I will do it next week/month/year

For a lot of people over the last few years, putting off a mortgage switch has been a sensible option. Since UK interest rates hit their lowest ever level in 2009, thousands of borrowers on variable rate mortgages have benefitted from very low mortgage payments.

But there are similarly lots of people who are on uncompetitive mortgage rates and are simply paying more than they need to. If you’re in this situation, then putting of the search for a new mortgage deal could be costing you a lot of money.

That’s the benefit of getting a free mortgage review from L&C – we can quickly tell you if your current mortgage rate can be beaten. If it can’t because you’ve already got a good deal, then you haven’t lost anything.

It's too confusing and complex

The process can certainly sound confusing and time-consuming but that’s where a broker can help. Not only will they have the expertise and knowledge to search the market for you, they’ll also do a lot of the legwork and paperwork for you.

At L&C, our advisers will have an initial call with you over the phone to get the low down on your current circumstances and to find out what you’re after – are you buying a new home or remortgaging? Would you prefer a fixed rate mortgage or a variable rate one? They’ll also be able to explain anything you don’t understand.

It’s then our job to go away and do all the searching for you – looking at mortgage deals from dozen of lenders. We’ll then help with the application and everything else until your new mortgage is up and running. It's easier than you think when you’ve got help!

I don’t trust banks or finance

As far as their reputations are concerned, it’s fair to say that banks haven’t had a particularly good time of it lately. However, the truth for most of us is that we need a mortgage if we’re going to own our own home – and if you have to borrow from a bank of building society, you may as well try and get as good a mortgage rate as you can and minimise how much you have to pay them each month.

There’s no point as all mortgages look the same

They may all look the same at first glance, but there can be huge differences between the mortgage deals available at any one time – both in terms of how they work and how much they cost.

An obvious difference is between variable rate and fixed rate mortgages. Variable rate mortgages can move up and down which means your mortgage payments can also change. Whereas a fixed rate mortgage is fixed and can’t move so your monthly payments are secured, for the period of the fixed rate. For someone who is worried about being able to afford their mortgage, there is a big difference between these two types of deal.

An adviser will be able to take you through the different types of mortgage deal available and explain the benefits of each.

It’s not worth switching my mortgage – it’s too much hassle for not enough reward

The potential savings from switching your mortgage can be substantial – certainly compared to the savings available with things like car insurance, utilities and your mobile phone. For someone with a typical £150,000 mortgage, cutting 1% off their interest rate could save £125 a month or £1,500 a year so being on the wrong rate could be costing you a lot of money.

To quickly check if you could save money on your mortgage, try our 1 Minute Mortgage Check tool.

I’m on a great deal already so I don’t need to move

That may well be true. A lot of borrowers managed to get some very low tracker rate mortgages before the credit crisis hit and these are still looking very good compared to new deals that are available now. There are also a lot of people on low Standard Variable Rates (SVRs) which are also very difficult to beat in the current market.

If you’re one of these lucky borrowers then you’re probably enjoying the fact that the Bank of England base rate has stayed at 0.5% for so long, but just keep an eye on your rate. We’ve seen a number of lenders over the last year or so increase their SVR out of the blue – pushing mortgage payments up for over a million borrowers.

Remember to check your interest rate every so often and make sure it’s still a good deal – our simple 1 Minute Mortgage Check tool can do that for you.

Also, if you’re on a variable rate mortgage, you may be considering switching to a fixed rate deal at some point to protect yourself if interest rates rise.

For a free, no obligation review of your mortgage, speak to one of our expert advisers today.

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