Billions of pounds price of fixed-rate mortgages get to the end of the introductory terms this month, but finding the right deal to switch to can be like hunting for a needle inside a haystack.
Don’t panic though – we’re here to help, with details of the least expensive rates at each loan-to-value level and suggestions about how to choose between a two and five-year fix.
Our analysis will help you find the correct deal for your circumstances and demonstrate what to watch out for when you’re remortgaging.
Is now the time for you to remortgage?
More than lb22bn worth of mortgages are visiting no more their introductory terms this month, according to research by The Times.
Homeowners on fixed-rate deals now face a race against time to avoid being automatically passed on to their lender’s standard variable rate (SVR) – which can be significantly more expensive than the cheap introductory rates provided by banks and building societies.
If you’re reaching no more your introductory term, the good thing is that you can usually agree a brand new deal as much as 6 months before your current one expires, and by doing your research and taking professional advice you could save thousands of pounds over time.
Three reasons to remortgage
You’ll avoid your lender’s SVR
We discovered that by switching prior to being managed to move on for your lender’s SVR, you can save at least lb200 monthly (based on an outstanding amount borrowed of lb200,000).
You may use equity to cut your costs
The payments you’ve made so far in your mortgage might enable you to remortgage at a lower loan-to-value (LTV), and thus a cheaper rate. Our research discovered that after two years of paying off a 95% mortgage, it may be possible to remortgage at 85%.
You can acquire a low rate
It’s an uncertain time in the housing market, but mortgage rates are extremely attractive right now, particularly on longer-term deals for example five-year fixes.
Remortgaging: should I get a two or five-year deal?
If you’re planning to switch deal, you’ll need to consider how long to repair your mortgage for – with two or 5 years the most common options.
Amid confusion over Brexit and what might happen to the Bank of England base rate, an increasing number of homeowners are actually fixing their rate for extended while deals remain attractively priced.
And it’s easy to understand why – the gap between your average rate on the two and five-year fix has closed in every of the last four years, and currently stands at just 0.4%.
| Year | Average two-year fixed-rate | Average five-year fixed-rate | Rate gap |
| April 2016 | 2.55% | 3.2% | 0.65% |
| April 2017 | 2.32% | 2.91% | 0.59% |
| April 2018 | 2.43% | 2.91% | 0.48% |
| April 2019 | 2.48% | 2.88% | 0.4% |
Cheapest initial rates: two-year fixed-rate remortgages
We’ll come on to the pros and cons of fixing for longer later on, however, let’s check out some of the chart-topping remortgaging rates now available.
The interactive chart below shows the least expensive introductory rates at each LTV.
Recently, the space between rates at lower LTV levels has closed significantly, meaning the least expensive remortgaging deal at 90% below is simply a quarter of the percent more costly compared to cheapest rate at 60%.
| Max loan-to-value | Lender | Initial rate | Revert rate | APRC | Fees |
| 60% | Lloyds Bank | 1.43% | 4.24% | 3.8% | lb999 |
| 65% | Yorkshire BS | 1.49% | 4.25% | 4.3% | lb1,495 |
| 70% | HSBC | 1.5% | 4.19% | 3.8% | lb1,499 |
| 75% | Yorkshire BS | 1.52% | 4.99% | 4.3% | lb1,495 |
| 80% | Lloyds Bank | 1.63% | 4.24% | 3.8% | lb999 |
| 85% | Leeds BS | 1.67% | 4.69% | 4.9% | lb1.999 |
| 90% | Barclays | 1.78% | 4.24% | 3.9% | lb999 |
| 95% | Newcastle BS | 2.59% | 4.49% | 5.1% | lb498 |
Cheapest initial rates: five-year fixed-rate remortgages
When you are looking at five-year fixes, it’s possible to remortgage at 75% LTV for any rate of below 2%.
As with two-year fixes, there’s little to choose between most LTVs, though 95% mortgages are around three-quarters of the percent more expensive than 90% deals.
| Max loan-to-value | Lender | Initial rate | Revert rate | APRC | Fees |
| 60% | Platform | 1.79% | 4.99% | 3.8% | lb1,499 (lb250 cashback) |
| 65% | Platform | 1.89% | 4.99% | 3.9% | lb1,499 (lb250 cashback) |
| 70% | Platform | 1.89% | 4.99% | 3.9% | lb1,499 (lb250 cashback) |
| 75% | Platform | 1.89% | 4.99% | 3.9% | lb1,499 (lb250 cashback) |
| 80% | Platform | 2.04% | 4.99% | 3.9% | lb1,499 (lb250 cashback) |
| 85% | Yorkshire BS | 2.04% | 4.99% | 3.9% | lb1,495 |
| 90% | Coventry BS | 2.25% | 4.74% | 3.8% | lb999 |
| 95% | Hanley Economic BS | 2.99% | 5.44% | 4.6% | lb999 |
How much more will it cost to remortgage in a higher LTV?
By now, you’re probably wondering what these figures could possibly mean for your monthly repayments.
How much you’ll pay each month depends upon the particular deal you’ll qualify for, but because an example, let’s say you’re borrowing lb200,000 over 25 years on the two-year fixed-rate deal at the rates shown above.
| Loan-to-value | Estimated monthly repayment (two-year fixed term) |
| 60% | lb793 |
| 65% | lb799 |
| 70% | lb800 |
| 75% | lb802 |
| 80% | lb812 |
| 85% | lb816 |
| 90% | lb826 |
| 95% | lb906 |
As you can observe, the main difference in monthly cost between the lowest initial rates at different LTVs is rather low, except for 95% mortgages, which remain significantly more expensive.
How to compare your mortgage: things to consider
How expensive would be the fees?
the deals we checked out earlier all had exceptionally reduced rates, but rates alone don’t tell the entire tale.
As you can observe, a few of these chart-topping deals include fees well in excess of lb1,000. Fee-free deals are available, though you’ll find it difficult to find a market-leading rate that doesn’t come with an up-front cost.
Does the deal have early repayment charges?
Longer-term fixes might offer rate security, however, many come with very high early repayment charges (ERCs), which can be as much as 5% of the overall loan.
If you believe you might want to move prior to the end of the fix, consider a shorter deal, or look for a portable product which comes without ERCs.
Can I make overpayments?
There’s no be certain that rates will stay this low in the future, therefore if you’re able to, it will make sense to create overpayments on your loan and lower the general term of your deal in the long run.
Some mortgage enables you to overpay by up to 10% from the capital each year, but others impose far stricter terms, so your research before jumping in.
Advice on obtaining the right mortgage deal
Finding the best mortgage can be a complicated business, using more than 5,000 deals on the market.
With this in mind, it may be beneficial to take advice from a whole-of-market mortgage broker, who are able to assess all the available deals and find you the right mortgage according to your financial circumstances.
