Watch That Mortgage
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
Watch That Mortgage
Summary:
Despite the steady Bank of England interest rates since August 2005, many mortgage customers are upset over unexpected increases in their mortgage costs.
Customers of the Nottingham Building Society received surprising letters announcing a rise in their SVR (standard variable rate) from 6.39% to 6.49%. This is puzzling since rates have been stable and, in some cases, have decreased. The Nottingham previously led the market with competitive rates, so this shift has concerned brokers.
Similarly, Norwich and Peterborough (N&P) raised their SVR from 6.3% to 6.49%. However, many of their customers are unaffected due to tracker deals linked to the base rate.
Both building societies are medium-sized. A Nottingham spokesperson claims that the average borrower will only see a minimal increase of less than £2 per week, noting that SVRs average around 6.59%.
Borrowers in the middle of a discount term face challenges in improving their situation, as moving to a different lender may incur early redemption fees. Those nearing the end of their agreements should consider re-mortgaging.
Caution is advised with cash-back options, which often have higher fees and interest rates. Carefully review terms and conditions to avoid costly mistakes.
One bank offering cash-back deals is Northern Rock. Previously, borrowers could get £1,000 upfront, with the requirement to return the cash if they switched mortgages within three and a half years. This offer has changed: the cash-back is now £750, with new terms benefiting those re-mortgaging to Northern Rock from other lenders. The repayment period is now reduced to two years in some cases.
While this benefits new customers, existing customers feel disadvantaged. Current customers re-mortgaging with Northern Rock and opting for cash-back remain tied in for three and a half years, unlike new customers who are only committed for two years.
The mortgage landscape is evolving, making it crucial to seek advice from an online broker. They can provide the best options suited to your needs, with many appealing deals available exclusively online.
You can find the original non-AI version of this article here: Watch That Mortgage.
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