The financial incentive for expat mortgage borrowers reaching the end of their current fixed rate deal to re-mortgage to a new deal has soared to an 11-year high.
According to the latest Moneyfacts, borrowers could save more than £3,000 a year by opting for a new fixed rate mortgage rather than sitting on their existing lenders standard variable rate (SVR).
The main reason for this is that expat borrowers who took out a two-year fixed rate mortgage two years ago have been enjoying some of the lowest rates ever seen. Indeed, in January 2017, the average expat two-year fixed rate mortgage came with a rate of 3.85%.
Now, however, those borrowers who took advantage of these highly competitive mortgages two years previously will be moving onto an SVR unless they choose to re-mortgage elsewhere.
In terms of repayment amounts, the typical expat borrower with a £200,000 repayment mortgage over a term of 25 years could therefore expect to see their monthly payments rise by £300 a month – or £3600 a year – if they remain on their current lender’s SVR.
However, by choosing to re-mortgage to a new short-term fixed rate deal – the typical repayment would be £250 a month (or £3000 a year) cheaper than if they did not re-mortgage.
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