Watch That Mortgage

Watch That Mortgage

Watch That Mortgage
Bank of​ England interest rates have been steady since August 2018 and even that move was southwards .​
Why then are thousands of​ mortgage customers up in​ arms about an​ unexpected and unwelcome increase in​ the​ cost of​ their mortgages?
Customers of​ the​ Nottingham Building Society have been staggered to​ receive letters from the​ Nottingham advising them of​ an​ interest rate rise,​ via an​ increase in​ its SVR (standard variable rate) .​
Mortgages linked to​ the​ SVR have had the​ interest rate raised from 6.39% to​ 6.49%
In the​ early part of​ 2018,​ the​ Nottingham Building Society made the​ headlines by topping the​ best buy mortgage tables for a​ number of​ weeks,​ offering a​ three year discount at​ only 4.35%,​ so this move has been seen as​ quite a​ turn-around and many brokers are less than complimentary about the​ move.
N&P (Norwich and Peterborough) are another society who has raised their SVR from 6.3% to​ 6.49% .​
This will not concern most of​ N&P’s borrowers,​ as​ most of​ their deals are of​ the​ tracker type,​ which is​ linked to​ base rate.
These are both medium sized building societies .​
a​ spokesman for the​ Nottingham says that the​ less than £2 per week increase for the​ average borrower means that they are still getting great value .​
SVR’s on​ average work out at​ around 6.59%.
There is​ very little a​ borrower can do to​ improve the​ situation,​ if​ you’re part way through the​ discount term .​
If you​ move to​ another company,​ then you’ll be hit by early redemption payments .​
If you’re approaching the​ final months of​ the​ agreement then you​ should look around with the​ idea of​ re-mortgaging.
The other type of​ deal to​ be approached with caution is​ the​ cash-back option .​
Often carrying higher fees,​ customers are also generally tied in​ to​ a​ higher interest rate .​
You would be well advised to​ check the​ terms and conditions thoroughly or​ you​ could end up making a​ costly mistake.
Northern Rock is​ just one of​ the​ banks offering cash-back mortgage deals .​
Until recently their borrowers could choose to​ receive £1,​000 at​ the​ start of​ the​ deal,​ provided this cash was returned if​ they changed to​ another mortgage within three and a​ half years .​
This has now changed and the​ sum is​ reduced to​ £750 .​
The terms of​ the​ offer have altered too .​
They now offer an​ improved deal for borrowers re-mortgaging to​ Northern Rock from elsewhere .​
The repayment time if​ they transfer to​ an​ alternative Northern Rock deal or​ redeem the​ mortgage is​ now only two years.
Whilst this is​ a​ good move for new customers,​ it​ is​ seen as​ unfair to​ their current mortgagees .​
An existing customer re-mortgaging with Northern Rock and taking the​ cash-back option will be tied in​ for three and a​ half years,​ whereas if​ you’re a​ customer making the​ move from another lender the​ tie is​ just two years.
It seems as​ though times are changing .​
For the​ very best advice on​ the​ current mortgage situation and a​ clear idea of​ what is​ available the​ best advice we can give is​ to​ contact an​ on-line broker .​
Often the​ best deals are reserved for internet customers and by using a​ broker you’ll be offered a​ range of​ options,​ tailored to​ suit you.

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