Remortgaging products looking good

The recent growth in the range of great new short-term mortgage products means that users should switch mortgage to save money, a new report has said.

According to Your Move, remortgaging on one of the newest five-year offers means that customers will be able to access savings at levels never seen before.

“According to the survey, the highest full-term savings are achieved with five-year deals,” Your Move says.

However, borrowers should be aware that new exit fees mean that buying and switching two-year mortgages might not be as cheap as they had hoped.

Your Move said: “Borrowers choosing a two-year fixed-rate deal have to be certain that rates will fall significantly from this point and remain low to make more savings than the five-year rate after repeated arrangement and exit fees.”

The best five-year deals include First Direct’s cheapest-ever discounted variable rate of 2.99 per cent, available until next spring. It says that its one per cent saving thereafter would add up to a £19,800 saving over a 25-year mortgage of £100,000.

Alliance & Leicester has a headline rate of 4.24 per cent, a £395 fee and a five per cent deposit on its two-year deals.

© Adfero Ltd

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