“Is it time to re-mortgage?” A lot of people are asking this question right now – but it is an impossible one to answer with conviction. Asking someone whether it’s time to re-mortgage is akin to asking someone whether the share price of some big company is now likely to go up, down or sideways, or whether the dollar is likely to strengthen against the Pound or the Euro over the next few months or go the other way; no-one knows the answer!
So it’s important to be wary of anyone who says, definitively, that ‘XYZ’ will happen in the future. Any financial planner worth their salt will explain in detail what the risks of something are and what has tended to happen in the past over the course of a long period of time – and that’s all anyone can hope to do. The rest is up to you.
It’s also important to remember that the mortgage market is a market like any other. Having weighed everything that we can, we decide to strike a deal or not to “today”. This means that some people win, having fixed a deal over a number of year at a certain rate, followed by interest rate rises – or vice-versa.
But if we consider that the true aim of good financial planning is not to gamble to try and get rich quick, but to enjoy peace of mind into the future – then it may be a good time to make a long term deal now. But we have to stress that “maybe”. Things may go the other way.
In the UK, the Bank of England has previously hinted about the likelihood of rates steadily rising to take a little heat out of the housing market. But more recent noises from the Bank now suggest this may be further off than we thought as the economy isn’t growing quite so quickly as previously forecast.
So now may be a good time to fix a deal that is comfortably affordable to you over a long period. HSBC, for example, has recently launched a range of no transfer fee mortgages for those people wishing to switch. If you click here to visit the HSBC news room, for example, you’ll see there are deals ranging from two to five years. If you can afford it easily – go for the longer term options. You may lose out, but at least you’ll have financial tranquillity – which is what it’s all about really.
The bank has clearly taken this decision as many people are concerned about exit fees, arrangement fees with a new lender (which can be excessive – so read the small print) and the overall hassle of arranging a mortgage transfer.
So just be careful in making sure you understand any exit fees form your current mortgage company if you’re transferring before the end of the agree term. Similarly, make sure you’re absolutely clear about any arrangement fees, legal fees and valuation fees from your new mortgage company; this is where a lot of their profit lies.
If you aren’t transferring mid-term, then there shouldn’t be any fees whatsoever on either side of your transfer deal with the HSBC products. But always make sure the rates you’re getting are competitive.