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Understanding Your Mortgage Renewal

Shopping around for a better mortgage deal is always recommended when your mortgage renewal is due. According to popular comparison site Money Supermarket, 72% of people simply sign their mortgage renewal forms without considering the new terms and conditions.

Shopping around for a better offer with a different lender has the potential to save you a lot of money. If you plan to stay with your current lender, do not be afraid to ask the bank manager for a better offer on your mortgage. As a loyal customer,they will work with you to keep your business. A fixed interest rate or a lower rate for a certain amount of time is both commonly offered by lenders.

Popular high-street bank Halifax has several different offers available to hold on to current customers and tempt in new ones. A standard variable rate allows you to have the best interest rate for your mortgage. The Halifax offers a competitive rate, and has been as low as 2.50% depending on status. Rates from leading competitors are generally much higher, with the standard being anywhere from 4% to 7.5%.The Halifax may also pay legal fees as well as any surveyor fees if you arrange your mortgage renewal with them.

HSBC offer equally competitive rates as well as the chance to link your savings account to your mortgage. Effectively this could see you paying a lower interest rate and repaying your mortgage early. HSBC generally do not charge a fee if a person pays their mortgage early, which can be hefty with other lenders,although this is subject to terms and conditions. HSBC also has the Power Credit Mortgage, which allows you to take out up to 80% of the equity in your home as a loan. This is good for people who are planning to stay in their home long-term and who wish to make home improvements.

Before renewing your mortgage with your present lender or with someone new, make sure you do your research. Many financial institutions advertise tempting special offers that turn out to be nothing more than gimmicks to get you to sign on the dotted line.

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