I don’t know about you, but I was alarmed when Boris Johnson became Prime Minister.
Not for the usual reasons, such as fears for the nation’s soul, or whether I’ll be able to buy fresh food after the bumptious bumbler pushes through his promised no-deal Brexit.
I was more concerned about my precarious finances, to be honest. Will I still be able to afford my mortgage by the end of the year?
The last 10 years has been a decade of low rates – which means there’s been less of a need to keep a close eye on the mortgage market to ensure I get the best deal.
But I do have regular spot checks on rates and offers to work out whether I could be better off remortgaging.
Is that a service that mortgage brokers do for their clients? If not, then I reckon they should.
I would hope that my mortgage adviser would get in touch if there’s a decent new deal which could make sense for me.
I took to Twitter to ask mortgage experts whether now could be a good time to remortgage.
One cynical journalist friend jokingly suggested that all mortgage brokers would say yes, simply to get more business.
One broker replied: “It’s more likely they will respond with ‘it depends on your current circumstances’.”
And there’s the rub, I guess. If someone’s on a long-term fixed rate with high exit penalty charges, then it’s unlikely to be a good time for them to remortgage.
But if someone’s on a variable deal, then there’s always going to be a bit of worry looking ahead to the possibility of rates rising and repayments becoming less affordable.
Mortgage adviser Dan White pointed out: “It’s a tricky one to answer as it depends on ERCs, fees, rates available, duration of new rate, objectives behind it and so on. I think it’s a difficult one to generalise for all.”
While that’s true, it surely must be easy to be specific about clients and whether their mortgage deals could do with being fine-tuned? Especially against the general background of no-deal Brexit and its possible problems.
I’d have thought most people would appreciate an email or call from their adviser, if only to calm their fears.
What can you say to them? I had a chat with David Hollingworth of L&C Mortgages about current issues.
He pointed out that “Rates are very competitive so remortgage options look compelling”.
There are five-year fixes available through brokers from as little as 1.71%, he said, which look tempting, especially given the uncertainty we’ll have to deal with this autumn.
It’s also a wise idea to look ahead to when fixed deals come to an end. Yorkshire Building Society recently talked about October being the biggest month for maturities of existing deals.
“Borrowers should be considering their options now so they can get a switch in place ahead of time and avoid drifting onto SVR,” says Hollingworth, which seems sound advice.
Jonathan Harris, director of mortgage broker Anderson Harris, reckons that with rates still “incredibly cheap”, “It has never been a better time to remortgage.”
He pointed out that “a fixed rate will give you certainty in what is very much an unknown situation with Brexit negotiations ongoing”.
I like fixed rates because it means I know what my future costs will be and therefore can ensure I can afford them.
But I don’t particularly like the new 15-year fix from Virgin Money, even though that would take me long beyond the current Brexit uncertainty. (Although there’s no guarantee of that!)
15 years just seems too far ahead to plan to me. But does that mean you’d accuse me of short-termism?
Whatever your view, I’d hope you’d share it with your clients. If you’re not contacting them now to either reassure them or help them get a better deal, then what the H are you doing for them?
Simon Read was the last personal finance editor at The Independent newspaper and now reports on finance matters for the BBC, The Evening Standard, The Daily Mirror and The Sun. He champions consumer rights and is a commentator on a range of tv and radio stations. He was a money expert on the BBC1 TV show Right On The Money and battles for fair treatment from companies in his Moneywise Fight For Your Rights column.
