2016 remortgage advice – avoid becoming a mortgage prisoner.
With new EU remortgage rules coming into effect in 2016, it is feared that many UK home-owners could find themselves trapped unable to remortgage, even if it’s to a lower rate.
As crazy as it sounds it's true, new affordability rules could leave many house house-holds trapped on their lender’s higher SVR.
For new deals even remortgaging home-owners will need to prove that they can maintain repayments should interest or mortgage rates rise. While you might be applying for and be able to afford a new deal at say 3%, an EU directive requires you to be stress checked at a far higher level.
This means that while a new deal could save you money, if you do not have the finance to support a rate of up to 7%, your application will be refused. At this point you’d be switched on to your lender’s SVR, which could be set at a far higher level than you are currently on.
In addition you must remember that SVRs are linked to the base rate, and so as soon as interest rates rise your SVR will too. You will have no control as to how or when this will happen.
Before stricter affordability requirements are introduced, you are advised to search the market to source a new deal while you still can.
Don’t miss out on a remortgage deal that will save you money in 2016, call Deal Direct for a low rate quote now.
Speak to one of our advisers on 0800 048 8828.
