Martin Lewis is urging all homeowners to consider switching their mortgage – and to do it right now. The urgent warning comes as the best mortgage rates hit yet another record low, with some deals now offering repayment interest rates of below one per cent.
On his website Money Saving Expert, the saving guru issued his urgent message. ‘This is a warning to EVERYONE with a mortgage. Rates have dropped below 1% – check urgently if you can switch & save £1,000s. Acceptance isn’t always easy but don’t just accept the status quo,’ he writes.
While the ultra-low rate bonanza won’t benefit everyone, Martin Lewis stresses that there is a ‘ferocious lending competition for the best customers.’ This means homeowners could make huges savings by remortgaging.
How much could you save? One of Lewis’s Twitter followers, Martin Evans, thanked the finance guru for saving him £150 a month after switching – a substantial reduction in mortgage repayments. While acceptance for a switch by your lender won’t be a reality for every mortgage holder it is worth looking into.
Martin Lewis suggests checking the best deal your lender can offer you, this is called a ‘product transfer’ – if you qualify, you wouldn’t need to do an additional affordability check.
Why you must act now
However, Martin Lewis’s upbeat tip also comes with a time warning to look into switching now. He explains that this is because delays are severe at the moment. ‘The stamp duty deadline and house-buying boom means brokers, lenders and conveyancing solicitors are in massive demand. This means things are taking longer, sometimes months right now,’ he writes.
The danger with delaying is not just missing out on months of lower payments, but potentially not switching in time before your current deal ends and your interest rates reverting to the SVR (standard variable rate) set by your lender, which is usually more expensive than a fixed-term mortgage deal.
If you think it’s too early to start thinking about switching, you’re probably wrong. ‘You’ll need to start earlier than normal, three to six months before it ends, particularly if you’re self-employed or have complicated circumstances,’ the savings expert warns.
Don’t delay, do your research on the deals available to you, and contact you lender as soon as you can.