peaked but homeowners remortgagingare due to end this year, according to UK Finance, and many will have borrowed on two or five-year fixed rates when typical pricing was around 1 per cent to 2 per cent.
“SVRs tend to be high, and you will be put on this type of mortgage if your previous deal came to an end and you have not negotiated a new deal, says Karen Noye, mortgage expert at Quilter. “Recent home improvements may increase the property’s value potentially leading to more equity in your property.”
Most lenders will let you overpay by up to 10 per cent of the outstanding mortgage amount each year without penalties. Rather than earning interest on savings, you either save the mortgage interest and pay a lower monthly payment or you maintain the monthly payment and reduce the mortgage term. Fox example, a £200,000 five-year fixed mortgage on a 25-year term at 5.5 per cent would be £154 cheaper per month if moved to 35 years.