Managing Through Mortgage Uncertainty
Written on 9 March 2025 by
What’s Happening in the Mortgage Market?
Mortgage rates have been the subject of much speculation, with predictions on when and how quickly they will decrease often failing to materialise. As of early 2025, the Bank of England base rate sits at 4.5%. While this may appear stable for now, changes can still occur. Economic factors such as inflation, political developments, and the rising cost of living all influence mortgage rates and the ability to secure a competitive deal.
Remortgaging: Why It’s More Important Than Ever
If your fixed-rate mortgage deal is coming to an end, it’s advisable to start exploring your options around six months before it expires. While some lenders have reduced the product transfer window to four months, early planning will put you in a strong position to prepare. Securing a new rate early can help you avoid being transferred onto your lender’s higher standard variable rate. Many lenders also now allow product switches in advance, making it easier to stay on a competitive rate without needing a full remortgage application.
Making Overpayments to Save Money
If you can afford to, making overpayments on your mortgage can significantly reduce the amount of interest paid over time. Many fixed-rate mortgages allow annual overpayments of up to 10% of the outstanding balance without penalties. This can be an effective way to lower overall mortgage costs, especially if you are currently benefiting from a low interest rate but expect to transition to a higher one in the future.
Why Are Some Properties Being Down Valued?
Lenders are exercising increased caution when valuing homes, leading to more properties being assessed at lower-than-expected values. This can impact both homebuyers and those remortgaging, as a lower valuation may require a larger deposit or result in a higher interest rate.
If this is a concern, researching property values in your local area and ensuring your home is well-maintained before an assessment can be beneficial.
Using Savings to Get a Better Mortgage Deal
If you have savings, using them to reduce your mortgage balance could help you qualify for a lower interest rate. Lenders typically offer better deals when your loan-to-value (LTV) ratio drops below key thresholds, such as 90%, 80%, 75%, or 60%. Checking with your lender about how overpayments might affect your options could lead to significant savings in the long term.
What to Do If You’re Struggling with Mortgage Payments
If you are struggling to meet your mortgage payments, contacting your lender as soon as possible is crucial. They may be able to offer temporary support, such as:
- A mortgage holiday (a temporary break from payments)
- Interest-only payments for a limited period
- Extending the mortgage term to reduce monthly payments
Proactively discussing your situation with your lender can help prevent missed payments and potential financial difficulties.
Get Expert Mortgage Advice
Navigating changes in mortgage rates and securing the best deal can be complex, making professional advice invaluable. A mortgage adviser can assist in finding the most suitable mortgage, whether you are remortgaging, purchasing a home, or facing financial challenges.
For personalised mortgage advice, contact John Charcol at 0808 303 5528 or enquire online. Additionally, if you are looking at your remortgage options you can find our free and easy to use remortgage calculator which helps you work out how much you could potentially save each month and year if you remortgaged onto a new rate.
Additional Support for Financial Struggles
If you need assistance with debt management or financial planning, the following organisations provide free advice:
- MoneyHelper – 0800 138 7777
- Citizens Advice – 0808 800 9060
- StepChange – 0800 138 1111
- National Debtline – 0808 808 4000
Final Thoughts
The best way to manage mortgage uncertainty is to stay informed and plan ahead. Regularly reviewing your mortgage, making overpayments when possible, and seeking expert advice can help you maintain control of your finances. If you are unsure about your next steps, speaking to a mortgage professional can provide the guidance needed to make the best decision for your circumstances.
Category:Nicholas Mendes
