As talk of a Bank of England base rate rise continues, the general advice appears to be for borrowers to switch to a better deal if they can. However, how do you know whether that would be the best advice for your particular situation?
The simplest way to find out if you should look for a better mortgage deal is to seek advice from a mortgage adviser who has invested in a CeMAP training course. There are instances where you may want to consider carefully before switching to a different deal.
If you are already on an excellent deal, you may not be able to find another product that is better, especially when you factor in the associated costs of switching. If you have little or no equity in the property, you may find it difficult to find a better deal until you repaid some of the initial loan.
Consider the penalties you will have to pay if you switch deals, as these vary and may make any savings you find redundant. Calculate all the costs involved before switching to make sure that the overall savings are worthwhile. Another occasion when you may not want to move to another deal is when you owe a small amount. Many lenders won’t consider an amount below £25,000 so you may have to remain on your current deal.
Before applying for a new deal check your credit rating, as any missed payments on a product may affect your credit rating. This may also be affected by a change in circumstances, like becoming self-employed.