Remortgaging to avoid becoming a mortgage prisoner.
According to a survey conducted by the Nottingham Building Society, around 14% of home-owners have failed to remortgage since the introduction of the Mortgage Market Review.
This figure could be set to rise as transitional arrangements for remortgaging customers are due to end in March next year. After March all mortgages whether for a home purchase or a remortgage, will be subject to stress tests and new affordability rules.
This means if you were accepted for a mortgage before the MMR was introduced, you might now find it difficult to get yourself a new deal, if checks show that you are unable to withstand a rate increase of up to 7%.
This means that even though you are applying for a lower rate deal you can afford, you will be refused if your finances will not stretch to making repayments on a much higher rate.
This may force thousands of home-owners to remain with their current lender and on their SVR.
If this describes your circumstances, you may be able to avoid becoming a mortgage prisoner with your current lender, by searching the market now and switching deals before these new rules come into effect.
If you would like to review what deals are available at your deposit level which could save you money, call us at Deal Direct for a ‘whole of market’ review.
For a low rate quote and impartial advice speak to an adviser today.
0800 048 8828.
