Refinancing your Mortgage

One of the most important things is to lower the interest rates. Just think that you are now paying 8% on your mortgage and there is a possibility to fund it at 5%. This is just one of the best ways to enhance your finances and reduce all other types of debt. The conditions of the mortgage can also be modified during refinancing.

If, for example, you choose to cut the term from 20 to 10 years, you will make your loans less expensive and disburse them more quickly. As an alternative, you can extend the deadlines and cut your montly payment.

Mortgage Standard Variable Rate (SVR)

An SVR mortgage is probably the mortgage of choice for most mortgage lenders, as it allows them to fix their own floating interest rates, and changes in the interest rates invoiced to the borrowers can be completely separate from the current BOE interest rates. In contrast to the US, where mortgage rates are usually 15 to 30 years, UK mortgage rates are generally capped at 2, 3 or 5 years.

Simultaneously, the borrowers have the possibility to re-finance themselves, either with another fixed-rate mortgage, on a different contract with the initial mortgage lender, or by looking for a mortgage lender that can offer better conditions. They have to crack the numbers and at least guess whether the refinancing will lower your mortgage interest rates in the near future, fixed-rate mortgage your months will lower enough to compensate for the substantially higher handling charges intrinsic to a fixed-rate mortgage.

The mortgage interest charged by Trackers fluctuates at the Bank of England's basic interest plus a pre-defined premium of approximately 1%. As the interest level of a mortgage and your money repayments vary, you know at least that the variation is in a tight margin compared to current interest levels.

As long as BOE interest remains low, trackers can be a good deal. The term of these loans is usually 2-3 years, but sometimes longer credit periods can be agreed. For SVR mortgage loans, the historic use of the provider's discretionary powers in determining its premiums in excess of BOR should be assessed prior to the conclusion of such a mortgage deed.