The Mortgage Clinic: 'How long can we hold out for the best deal?'


Our current two-year fixed deal runs out on 5 December but, with many mortgage rates seemingly dropping fast, what's the absolute latest we can apply for a remortgage? We really don't want to miss out on any rate cuts – obviously it's a risk they might rise again, but we're happy to take the chance. J Greenway, Nottingham

Having seen mortgage rates slide in the past few months, and with expectations of further falls, it's no surprise that homeowners facing a remortgage deadline are wondering how long to hold out.

The average two-year fix nudged 7.08 per cent in early July but has since slipped to 6.39 per cent thanks to lower rates from lenders such as Abbey, A&L and HSBC, according to data analyst website, Moneyfacts. "It's now the same average as before the credit crunch last summer," a spokesman said.

On Friday, Nationwide announced cuts of up to 0.3 per cent, while Yorkshire building society reduced its fixes by up to 0.5 per cent; the latter's best two-year fix for an LTV of 90 per cent is now 5.89 per cent, with a £495 fee.

Under the circumstances, it's no surprise that your predicament is shared by other readers, and one landing ever more frequently in Mortgage Clinic's in-tray.

The absolute latest recommended by mortgage specialists is one month before a deadline. "Typically, a remortgage isn't held up by the speed of obtaining an offer but the speed of getting an up-to-date redemption certificate from your lender, and all the legal papers to be signed," says Andrew Montlake of broker Cobalt Capital. "But generally, you can apply for a mortgage up to about a month before."

Richard Morea, of London & Country, however, suggests waiting "no later than six to eight weeks". An awful lot depends on your circumstances, he says: "For example, if you and your partner have been in a steady job for years, it should be a swiftly resolved matter."

But if you're both newly self-employed with few financial records, it'll take a lot longer to find a lender who'll speedily process your application because of your higher perceived risk.

The danger, says Katie Tucker at Mortgage Force, is a stiff penalty if you don't complete before 5 December. "You'd be landed on the lender's standard variable rate, so your payment would likely be a few hundred pounds extra for each month you don't make complete the switch in time," she advises.

One common tactic is to lock in to the most competitive rate, and switch to a cheaper one nearer the time. "However, you run the risk of paying fees upfront with a lender that you then ditch closer to your deadline, and can't then get them back."

Send us your questions and you could receive £50 to spend at Amazon

Foxed by jargon? Worried by the credit crunch? Email a question to mortgageclinic@independent.co.uk. We will not reveal your identity, and we cannot give specific advice. If your question is printed, you'll receive a £50 voucher from Amazon.co.uk, so you can kit out your home with anything from a lawnmower to an espresso machine. www.amazon.co.uk/homeandgarden

PROMOTED VIDEO
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Software Development Manager

    £40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

    Ashdown Group: Product Manager - (Product Marketing, Financial Services)

    £30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

    Recruitment Genius: Compliance Assistant

    £13000 per annum: Recruitment Genius: This Pension Specialist was established ...

    Ashdown Group: Market Research Executive

    £23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

    Day In a Page

    Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

    Isis hostage crisis

    The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
    Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

    The runaway buccaneers and the ship full of gold

    Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Maverick artist Grayson Perry backs our campaign
    Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

    Assisted Dying Bill: 'I want control of my life'

    This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
    Move over, kale - cabbage is the new rising star

    Cabbage is king again

    Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
    11 best winter skin treats

    Give your moisturiser a helping hand: 11 best winter skin treats

    Get an extra boost of nourishment from one of these hard-working products
    Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

    Paul Scholes column

    The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
    Frank Warren column: No cigar, but pots of money: here come the Cubans

    Frank Warren's Ringside

    No cigar, but pots of money: here come the Cubans
    Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

    Isis stands strong as its numerous enemies fail to find a common plan to defeat it

    The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

    Virtual reality: Seeing is believing

    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
    Homeless Veterans appeal: MP says Coalition ‘not doing enough’

    Homeless Veterans appeal

    MP says Coalition ‘not doing enough’ to help
    Larry David, Steve Coogan and other comedians share stories of depression in new documentary

    Comedians share stories of depression

    The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
    Has The Archers lost the plot with it's spicy storylines?

    Has The Archers lost the plot?

    A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
    English Heritage adds 14 post-war office buildings to its protected lists

    14 office buildings added to protected lists

    Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Scientists unearthed the cranial fragments from Manot Cave in West Galilee