In a world full of uncertainties, from global conflicts to changing economic conditions, protecting your finances has never been more important. For homeowners, remortgaging early can be a smart way to secure your financial future and lock in a rate before it changes again. If you're considering remortgaging, it's important to understand the current market. Here's why acting now could be a good move for your peace of mind.
Global Events Are Shaping the Mortgage Market
The global economy is highly interconnected, and events outside the UK continue to influence mortgage rates and lender decisions. Geopolitical developments, such as the war in Ukraine and policies from President Trump’s second term, show how external factors can disrupt markets:
The War in Ukraine is causing energy market disruptions and supply chain issues, driving inflation worldwide. While the Bank of England is working to control UK inflation, these global challenges create ongoing uncertainty.
President Trump’s second-term policies have led to international ripple effects, such as exchange rate changes and shifts in investor confidence, both of which directly impact UK mortgage markets.
These examples highlight how quickly financial conditions can change. In this unpredictable environment, waiting for rates to drop could be a risky move.
Starting Your Remortgage Early Provides Certainty
Remortgaging early allows you to lock in a fixed rate and protect yourself from potential interest rate increases. Many lenders let you secure a deal up to six months in advance, giving you time to explore the market before finalising your choice.
With inflation easing and the Bank of England lowering interest rates to 4.5% in February, there’s hope that rates could drop further in the coming year. However, as past years have shown, nothing is guaranteed, and economic conditions can change quickly.
Fixed rates are influenced by SWAP rates, which often fluctuate due to global events. Acting now can help you secure the best deal available and provide peace of mind in today’s uncertain financial climate.
The Role of SWAP Rates and External Factors
Many homeowners don’t realise that fixed mortgage rates are influenced by SWAP rates, not just the Bank of England base rate. SWAP rates respond quickly to global economic changes and can be impacted by events like political shifts, conflicts, or new regulations.
Recent data shows how just one global event can cause SWAP rates to rise suddenly, which affects fixed-rate mortgages almost immediately. This makes it important to act quickly if you’re eligible to remortgage.
Waiting to “see what happens” could be risky if SWAP rates go up again, even if the base rate stays the same. Locking in a deal early with your lender can help you avoid being caught off-guard by these market changes.
Why Waiting Could Be Risky
While it might be tempting to delay and hope for lower rates, this can be a gamble. Lenders have already priced in expected reductions to the base rate, meaning fixed rates won't necessarily come down further in the short term. If global events create sudden instability, rates could even climb again, leaving you locked out of the most attractive deals.
By remortgaging early, you can lock in a rate now and rely on your broker to monitor the market for better deals. This proactive approach saves time, potential stress, and ensures you're not caught out by adverse market conditions.
Benefits of Acting Now
Here’s why remortgaging early is a practical and beneficial choice for homeowners right now:
Secure Economical Rates Early: Lock in a mortgage rate now and protect yourself from future increases driven by global instability.
Flexibility with Advance Bookings: Most lenders allow you to secure a deal up to six months ahead, giving you plenty of time without having to make a rushed decision.
Expert Market Monitoring: Your mortgage broker can track rates on your behalf, allowing you to switch deals if a better offer emerges before finalising.
Peace of Mind: Remove the uncertainty of fluctuating monthly payments by locking in a fixed rate that remains constant over time.
Protection Against Volatility: With SWAP rates subject to global and financial shifts, securing a rate early ensures you won’t be caught off guard by sudden spikes.
Our Final Thoughts
Remortgaging early is not just about saving money; it’s about giving yourself financial stability during uncertain times. By acting now, you can lock in a rate, avoid potential pitfalls in a volatile market, and gain peace of mind knowing your finances are protected.
With lenders already incorporating future rate cuts into their deals, waiting in the hope of lower rates could put you at risk of missing out entirely. Take advantage of the six-month buffer that most lenders offer and consult with a mortgage broker to explore your options.
Don't leave your mortgage to chance. Take control of your financial future by remortgaging early and staying ahead of the curve.
Your home may be repossessed if you do not keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.
Published by Beechwood Mortgages Ref: 219335 with review and approval from Stonebridge Mortgage Solutions Limited who is authorised and regulated by the Financial Conduct Authority Ref: 454811.
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