Are you coming to the end of your deal?

Special introductory deals can be very helpful, but they run out eventually.  Similarly, fixed-rate mortgages also have a finite run-time, after which you are typically switched onto your lender’s standard product.  Remember that when a financial product comes to the end of its life, you don’t necessarily just have to take what your lender gives you, nor do you have to go out and purchase a fresh version of the same product (or a product which is as close to it as you can find).  Instead, you can take your time to look at your options and think through them carefully.  Indeed, you may even want to get professional advice, especially for important decisions, such as choosing the right mortgage product for you.

Remember to think about the possibilities of “hidden” products Let’s assume you bought your home two years ago and took out a fixed-rate mortgage with a two-year lifespan.  If you leave your mortgage just to run its course, then you’ll stay with the same lender but be moved onto a variable-rate product.  If, however, you approach your lender before the fixed-rate period ends, they may be willing to offer you an alternative deal, which could be more attractive.  This deal may not be advertised, hence the importance of asking directly.  You will only know whether or not this deal is your best option when you compare it to what else is on the market, preferably including the “hidden” deals, which aren’t widely advertised.  When making your comparison, however, you may want to take into consideration the fact that remortgaging with your current lender could save you the time and hassle of having to submit an entirely new mortgage application as you would have to do if you went to a different lender.  Whether or not this makes the deal worth it will, of course, depend on what is on offer and how you feel about having to go through the entire mortgage evaluation process all over again.  It is, however, a point worth noting.

The bigger picture While it may seem only a short while since you last went through the process of finding and applying for a mortgage, it’s worth remembering that mortgages are significant financial products.  Therefore, even though the difference between the right mortgage and all the others may ultimately come down to fine details, the sheer size of the loan involved can mean that those fine details end up making a huge difference to the overall state of your finances.  Hence it follows that a fixed-rate deal coming to an end is an opportunity to assess your current lifestyle and financial situation to make sure that you get the mortgage product which is right for you now.  This may be a fixed-rate mortgage, but it may also be a variable-rate mortgage.  It may be a standard, repayment mortgage or it may be an offset mortgage.  It may be a mortgage from a mainstream lender or it may be a product from a niche lender (or it may be a niche product from a mainstream lender).  There are so many mortgage deals on offer from so many different lenders that navigating your way through them on your own could be something of a nightmare.  This is why it can be helpful to make use of the services of a professional mortgage broker.  While mortgage brokers do, of course, charge a fee for their services, you’re not just paying for the convenience of having the hard work done for you.  You could actually wind up not only being shown a great deal which you would never have found on your own but also paying less for it than you would have if you had gone directly to the lender. Your property may be repossessed if you do not keep up repayments on your mortgage.