If you’ve found yourself thinking about your mortgage more than usual recently, you’re not on your own. According to a survey by Confused.com, 3 in 4 borrowers feel more concerned about mortgage rates and housing than they did five years ago.
As one of our Skipton members, we want you to feel as confident as possible when it comes to things like paying for your home. After all, your mortgage is probably one of the biggest financial commitments you’ll make. That’s why it’s so important to fully understand how it works and not get too overwhelmed.
Whether your current mortgage deal is close to coming to an end, you’re looking to borrow more to pay for things like home improvements, or you simply want to know more about the options available to you, here are my top tips for managing your mortgage.
Prepare three months before your current deal ends
You know the saying – fail to prepare, prepare to fail. If your initial deal period ends soon, don’t wait until last minute to think about what comes next.
As a member, we’ll let you know three months before your deal ends and encourage you to get in touch with us or your mortgage broker to discuss your next steps.
Depending on the type of mortgage product you're on, you'll have a few options to choose from when your deal period ends. You'll either:
- Start paying the Mortgage Variable Rate (MVR) or discounted Mortgage Variable Rate (where applicable). The interest rate on this is set by us and changes from time to time.
- Take a mortgage out with another lender.
- Switch to another deal with us.
In the three months before your current deal ends, you’re able to select your next one. And you’re not tied to it, meaning you can switch again ahead of your deal ending – for example, if rates were to fall in that time.
It’s worth thinking about having a conversation with an expert a good three months before your current deal ends. That way you know where you stand and are in a good place if you need to look at things like your monthly finances in preparation for what will likely be higher payments.
Good to know
If your initial deal comes to an end and you don’t do anything, we’ll automatically transfer you to our Mortgage Variable Rate or discounted Mortgage Variable Rate (depending on the terms of your existing mortgage).
Although the Bank of England made several base rate rises across 2022 and 2023, to protect our members we haven’t passed all of those increases onto our Mortgage Variable Rate. However, if our Mortgage Variable Rate (or discounted Mortgage Variable Rate) is higher than your initial rate, your payments will increase.
Be ready to pay more
In a very short space of time mortgage rates went from record lows in 2021, to the highest we’ve seen in 15 years in 2023.
What’s encouraging to see is the cost of living (inflation) seems to be easing and interest rates have hopefully peaked – and may even start to come down this year. All this could mean lower mortgage rates (barring any hiccups).
However, we don’t expect rates to fall back to where they were in 2021 anytime soon. So the fact of the matter is, if you took out a fixed rate deal when interest rates were on the lower side, whatever route you go down next you’re likely to pay a higher rate.
That’s why it’s so important to explore the options available to you in good time.
Here at Skipton Building Society we offer a range of mortgages with fixed and variable rates. There are pros and cons to each type of mortgage, which is why a chat with one of our mortgage advisers or your broker could come in useful. It’s all about finding what works best for you.
You’ll be pleased to know that switching from one Skipton mortgage product to another doesn’t require you to pass an affordability check, there are no legal fees, and no valuation requirements.
Consider paying more now to pay less in the future
If you can afford to overpay your mortgage, you could pay off your mortgage sooner and save money in interest payments.
By paying more now – either as a lump sum or regular payment – you’ll reduce the amount you need to pay in the future. This could come in very handy if your financial circumstances are due to change, such as reducing your work hours or even planning to retire in the next few years. You should know that overpayment may lead to your contractual monthly payment being recalculated.
And if you took out a deal when mortgage rates were lower, overpaying now whilst you’re on a cheaper rate could make all the difference later down the line.
It’s important you’re mindful of early repayment charges though. If you’re on a Skipton fixed rate mortgage, you can overpay up to 10% of your original loan amount every year without having to pay an early repayment charge.
Wanting to make home improvements – think about additional borrowing
You could borrow more money on your mortgage to raise extra funds for something that may involve a larger expense – such as a new kitchen or buying a new car. If you’ve had a mortgage with us for at least the last six months, you might be able to borrow up to 95% of the value of your home (75% for Buy to Let customers), subject to criteria including affordability and conduct of your account.
Plus, if you’re looking to make your home more energy efficient – including things like solar panels, insulation or new windows and doors – we offer Green Additional Borrowing products to our existing borrowers.
Even better, to help you see what green improvements you could make to your home, we offer our home-owning members a free EPC Plus Report from Vibrant*. The report will tell you how energy efficient your home is (for homes built more than 10 years ago).
You can find out more about our Green Additional Borrowing range and the EPC Plus offer on our Additional Borrowing page.
If you have any uncertainty, seeking some advice could make all the difference
Having a conversation with an expert could be one of the most important things you can do when it comes to your mortgage.
It could help you to understand what you already know and what you need help with:
- From being aware how your mortgage works
- What rate you’re on and what you’ve got left to pay
- Whether you could benefit from overpaying your mortgage
- What’s best for you if you’re coming to the end of an initial deal
There can be a lot to get your head around when it comes to your mortgage. And as one of our members, the last thing we want is you to feel uncertain about something so important. That’s why we’re here to help you feel confident about managing your mortgage.
You can phone our friendly team for help with your mortgage questions on 0345 850 1711 or book a video call when it suits you.
You could lose your home if you don’t keep up your mortgage repayments.
*Vibrant are owned by Connells Group, a Skipton Building Society Group company.
EPC Plus and most Buy to Let mortgages are not regulated by the Financial Conduct Authority.