Is your mortgage term ending in the next 6 months? Here’s why you should take action NOW.

If you’re a homeowner and your mortgage term is set to expire within the next six months, now is the time to act. While it may seem like there’s still plenty of time, waiting until the last minute can lead to missed opportunities and unnecessary stress. Here’s why you should take action now to ensure a smooth transition when your mortgage term ends.

Avoiding the standard Variable Rate SVR

When your mortgage term ends, your lender will you likely transfer you to their Standard Variable Rate (SVR), which is currently around 7.5% to 8.5%. This rate is typically higher than the rate you were previously paying, resulting in increased monthly payments. By taking action now, you can explore alternative options to avoids being moved onto the SVR and potentially save money in the long run.

Exploring Refinancing Options

Refinancing your mortgage allows you to renegotiate your terms with your current lender or switch to a new lender altogether. This can be a strategic move if you’re looking to secure a lower interest rate, reduce your monthly payments, or access equity in your home. However, the refinancing process can take time, which is why it is essential you give yourself time and start exploring your options in advance of your term’s expiry date.

Strike When the Rates are Good

Rates can change a lot in 6 months, so it’s a good idea to start keeping an eye on them early to ensure you don’t miss out of a good deal.  This is where getting specialist advice will help immensely, as a mortgage broker will have a sense of where the rates are headed and when is the right time to get in quick and secure your deal.

Avoid Penalties

Depending on your mortgage agreement, there might be penalties that come with a change in your term, such as switching lenders. It’s always best to get out ahead of these charges by refreshing yourself with what your term stipulates, so you have the time to find the best solution to your situation. If you leave it until the last minute, you might be stuck settling for a deal you’re not happy with because you don’t have time to really search for a better one.

If your mortgage term is ending in the next six months, don’t wait until it’s too late to take action. Start exploring your options now to avoid higher interest rates, secure a better deal, and ensure a smooth transition to a new mortgage product. Remember to always carefully evaluate all your options and make decision that’s right for your financial situation.

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