If you are needing to renew your mortgage but not sure where to start, this may be of help.

If you are looking to renew your mortgage in the current financial climate, then you don’t need reminding that it will need careful consideration. I did some research into what the best practises for this process might be and this is what I found:

Begin by looking into options well before your current deal expires, ideally six months in advance. This will allow you to assess the market, consult with mortgage advisors and decide without the pressure of any close deadline. This can also provide leverage in negotiating terms and prevent you from being moved to your lender’s standard variable rate (SVR), which is usually higher.

Next, take a hard look at your finances. Consider any changes in your income, expenses and long-term financial goals. Have a serious think about how much you can realistically afford in monthly repayments without compromising your current lifestyle. This should also include checking your credit score, as it can significantly impact the interest rates available to you.

Shop around and compare as loyalty doesn’t always pay off when it comes to mortgages. The best deal with your current lender years ago may not be the best deal now. Use comparison websites, consult with independent mortgage advisors and don’t shy away from direct inquiries with banks and building societies. Each lender has different criteria and offers and shopping around can unearth competitive rates and terms that better suit your current financial situation.

With the Bank of England’s interest rates always changing based on economic conditions, it’s important to think about rate fluctuations. Fixed-rate mortgages can offer stability in repayments, making budgeting easier during this cost of living crisis. But, be mindful of the term you choose, as longer terms offer more stability, while shorter terms may provide more flexibility to switch deals as the market changes.

Approach your current mortgage provider and ask for better terms. Lenders often have some flexibility and may offer competitive terms to retain customers. Highlight your payment history and loyalty to strengthen your bargaining position.

Understand the fees involved as renewing a mortgage often involves exit fees, arrangement fees and valuation fees. These need to be included into your overall cost analysis to ensure the switch is financially beneficial in the long run. Sometimes, a lower interest rate can be offset by high upfront fees, making it less advantageous than it appears.

Seek professional advice from a financial advisor or mortgage broker can offer personalised insights into deals you might have missed and guide you through the application process, potentially saving you thousands over the term of your mortgage.

Finally, be prepared for the unexpected, as in these uncertain times it’s wise to allow for unforeseen changes in your financial situation. Consider mortgage products that offer flexibility, such as overpayment options or payment holidays, to provide a buffer in difficult times.

The bottom line is that renewing a mortgage in this current climate requires a balanced approach, combining thorough market research, careful financial planning, and strategic negotiation. 

Leave me a comment below if you have recently renewed your mortgage and are happy to share your experience (good or bad) I would love to hear from you.