A widespread number of low rates available on the market have encouraged many homeowners to remortgage recently, according to the latest data from broker, Springtide Capital.
However, in light of recent changes to interest only lending, Springtide consultants have noticed that many are reluctant to switch to alternative repayment options owing to concerns around the high fees attached to these lower rates.
Typically, the monthly costs increase fairly substantially when clients switch from interest only to repayment mortgages, however with mortgage rates having reduced so much the difference often is not as bad as people suspect. For example a £150,000 mortgage at 4.5% on interest only will cost £562 per month, whereas the same mortgage at 2.5% will cost £673 per month on a 25 year repayment mortgage. Borrowers need to factor in set up and exit costs when looking at this.
For independent whole of market mortgage advice contact Integrity IFA now or visit us online to use or free to use mortgage source and calculator.
