£22bn of fixed mortgages reached end of introductory terms in April

By Natasha Adamson

April was a busy month for property owners in Northern Ireland and the rest of the UK looking to switch to a new mortgage product, as research by The Times suggests that £22billion worth of fixed mortgages came to the end of their introductory terms at the end of the month.

Anyone who failed to switch their mortgage product in time before the introductory terms lapsed will have automatically been passed on to their mortgage lender's standard variable rate (SVR), which can work out substantially more expensive than the introductory rates available with different banks and building societies. Those mortgage borrowers that were slow to review their product and make the switch can of course still remortgage, but face making higher monthly mortgage payments until such time as the remortgage is completed by their conveyancing solicitor.

Avoiding an automatic switch to a lender’s SVR is one of the three main reasons that will encourage mortgage borrowers to switch to a new mortgage product. Others will want to increase their equity in the property, and thereby reduce the size of their mortgage debt. Cheaper rates are often available when the loan-to-value ratio is reduced, and periodic equity increases can also enable a borrower to clear their mortgage quicker.

Another factor that often motivates people to remortgage their property is the availability of low fixed mortgage deals. The rates on offer are very much dependent on the economic climate at the time, and attractive mortgage rates are currently on offer, giving borrowers the opportunity to fix into a low rate for a number of years at a time when there is uncertainty about the immediate future of the economy.

The conveyancing costs associated with a remortgage may be included as part of the terms of the new mortgage product, in which case the mortgage lender will instruct a property solicitor to handle the legal process without any cost to the borrower.

Other mortgage products include a cashback to assist with the legal costs and it will be up to the mortgage borrower to instruct their own property conveyancing solicitor. In such cases the borrower's solicitor will also act for the Lender, and as such Lenders will want to approve the conveyancing solicitor chosen. This is done by way of a list of panel solicitors that the Lender has pre-approved, and if one of them is chosen you will only need to instruct one solicitor. If the solicitor you choose to use is not on this panel you will have to instruct a second firm that is, and they will act for the Lender only, though you will be responsible for the costs of both solicitors.

You can save yourself legal costs by using one solicitor to act for both you and the mortgage lender. Before instructing a conveyancing lawyer ask them to confirm that they are on your mortgage lender's panel.

Wilson Nesbitt is on the panel of all the major mortgage lenders. Click here if you are remortgaging your property and want to speak to one of our property conveyancing solicitors in Belfast or Bangor today.