How homeowners can save nearly £100 a month
One in four homeowners plan to act now and remortgage in January, but they underestimate the potential savings by nearly half.
A survey of 2,000 homeowners by TSB found that they expected to save an estimated £49 a month, but the bank said the actual average saving is £96 a month, or £2,300 across the life of a two-year fixed term on a £100,000 mortgage.
By remortgaging at a lower fixed rate, homeowners have been able to free up cash to use towards holidays, repaying more of their mortgage, buying a new car or carrying out DIY to their property.
Ian Ramsden, director of mortgages at TSB, said: “Mortgage payments are often the biggest outgoing for many households. By remortgaging, homeowners stand to save up to £96 per month on average, which can make a huge difference to family finances. It could mean being able to afford a family holiday, carry out much needed home renovations, or simply help ease the pressures on household finances each month.”
However, Ramsden cautions that remortgaging might not be right for everyone and it’s important to understand your options.
“It doesn’t have to be complicated or time consuming to remortgage so it’s well worth investigating if people are looking for ways to make their finances go further in 2017.”
TSB said it’s seen a 27.5% increase in remortgage applications in 2016 compared to 2015 and since the Bank of England cut the base rate to 0.25% in August, 6,000 people have remortgaged onto the lower rates.
See YourMoney.com’s Homeowners consider the ‘unthinkable’ to save thousands on mortgage deal for details on why people stuck on expensive fixed rate mortgages are redeeming existing deals, despite big penalties.