In the exciting world of borrowing money to buy homes, there’s a concept known as a mortgage. A mortgage is essentially a loan that you take out to purchase a house. And like any loan, it comes with an interest rate that you have to pay in addition to the amount you borrowed. Typically, mortgages have a term of 25 years, during which time you make regular repayments to the lender.
Now, here’s where things get interesting. A mortgage deal usually lasts a few years, say 2, 3, 5, or even 10 years. And when that deal comes to an end, you have the option to either stick with your current lender or find a new one. This is called remortgaging.
Historically, many people opted to remortgage to a new lender when their deal ended. This was primarily done to find a better interest rate or to take advantage of new features or benefits that were being offered. It was like playing the mortgage game and trying to get the best deal possible.
However, there has been a shift in the mortgage landscape in recent times. Homeowners are increasingly choosing to stick with their current lender rather than going through the hassle of remortgaging to a new one. And you might be wondering, why on earth would they do that?
Well, there are a few reasons why homeowners are making this choice. Firstly, the mortgage market has become a bit more competitive, with lenders offering better deals and lower interest rates to entice borrowers to stay with them. This means that the difference between the rate you’re currently paying and the rate you could get by remortgaging might not be as significant as it once was.
Secondly, remortgaging can be a bit of a pain in the you-know-where. It involves going through a new application process, providing all the required paperwork, and possibly even having your property revalued. It can take time and effort; for some homeowners, it’s not worth the hassle.
Lastly, sticking with your current lender can also provide some peace of mind. You already have an established relationship with them and know what to expect regarding customer service and communication. This familiarity can be comforting, especially when dealing with something as important as your home.
So, what does all this mean for homeowners? If your current mortgage deal is ending, it might be worth considering the option of sticking with your current lender. Take some time to research the other deals available in the market and see if there’s a significant difference in interest rates or benefits. If there isn’t, and you’re happy with your current lender, then there’s no harm in staying put.
However, doing your due diligence and making an informed decision is always a good idea. Speak to a mortgage advisor or do some online research to ensure you get the best possible deal for your circumstances. After all, a mortgage is a significant financial commitment, and you want to ensure you’re making the right choice.
In conclusion, homeowners increasingly opt to stick with their current lender when their mortgage deal ends. This can be attributed to the more competitive mortgage market, the hassle of remortgaging, and the peace of mind that comes with familiarity. So, if you’re in the same boat, take some time to weigh your options and make a decision that suits you and your home. Happy mortgage hunting
