A case study

Here is an example of how much you could save when your fixed rate deal has come to an end.
Lucy took out a two-year fixed-rate mortgage in 2019 on a property worth £443,000. Lucy was only able to raise a 5% deposit and borrowed £421,000.

She was offered a rate of 3.98% on a 95% Loan-to-Value mortgage, over a 32-year term. Lucy’s monthly repayments were £1,918.

In 2021, Lucy’s deal is coming to an end. Her property is now worth £450,000 and with a few overpayments, her mortgage balance is now at £405,000.

She speaks to an adviser who finds that she can now get a 90% loan-to-value mortgage, as she has £45,000 equity in her property.

The best rate her adviser finds for her is 2.24%. Lucy re-mortgages for £405,000 for a 30-year term.
Her new monthly repayments are reduced by £372 per month, to £1,546. And she has saved £4,464 a year.

Remortgaging doesn’t always guarantee that you’ll reduce your monthly outgoings, but it could. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.

https://www.which.co.uk/money/mortgages-and-property/mortgages/remortgaging-and-managing-your-mortgage/remortgaging-how-to-save-thousands-on-your-mortgage-abqyz2u0cnmd

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