CIS Mortgage

How often should I review my mortgage?

We specialise in Mortgage Advice for Subcontractors paid via the Construction Industry Scheme (CIS)

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When it comes to your mortgage, it pays to shop around. So if your fixed term is about to expire, or if you are struggling with your current mortgage repayments, it might be in your best interest to consider a change of mortgage deal.

When to review your mortgage

While it might be that your mortgage deal is still right for you, you might also find a better deal elsewhere depending on your circumstances. It could be you want to save money, borrow more, or simply have a different product with more or less flexibility. 

You should consider reviewing your mortgage in the following circumstances.

When interest rates change

If you hear that interest levels are dropping, be proactive, and compare your mortgage to that provided by other lenders. It might be that your lender will reduce your interest anyway if you are on a standard variable rate, but it’s still worth checking to see if you can find better deals elsewhere. If you can find a better interest rate, and especially if you don’t have a lot to pay through your lender’s early exit fees, then it might be worth making the switch.

When your existing mortgage deal comes to an end

If your fixed term mortgage product is approaching its end date, you should consider switching your mortgage deal when it expires. You should also start the search if your lender puts you on their standard variable rate, especially if the interest is higher than you would like it to be.

You might be able to find a better mortgage deal elsewhere unless you can come to a suitable agreement with your current lender. It’s worth looking for your next mortgage deal a few months in advance of it finishing, as it can take some time to find the right product and make sure the application goes through smoothly.

When your financial circumstances change

If your circumstances have changed for the better, you might be able to save thousands of pounds on loan interest if you can reduce the length of a new mortgage term by paying more each month. 

On the other hand, if your finances have taken a turn for the worse, you might be able to find another mortgage lender with more favourable interest rates. Whatever your circumstances, it is still in your best interest to commit to research, as you might be better off in both the short and the long term.

Once a year

It’s good practice to review your mortgage on an annual basis, no matter what mortgage deal you are currently on. 

If you are on a standard variable rate, you have the option of moving at any time that suits you. Speak to a broker about finding the right mortgage deal, as it could be with another lender. 

If you are on a fixed rate, you can leave early, but you will have to pay exit fees. If these fees can be substantial and are set depending on the length of your fixed term product that is still remaining.  

However, if your fixed term is about to end, or if the repayments aren’t bank-breaking, then you might want to leave early if you can find a cost-effective deal. This way, you won’t have to be subject to your lender’s standard variable rates, especially if they are higher than others on the market.

Consider a mortgage broker

Mortgage brokers will do much of the legwork for you, comparing quotes and offers from different lenders, and pointing you to the deals that are right for your circumstances. They often have access to lenders that you may never have heard of, so they might be able to source unique loan deals that are not widely advertised. As far as CIS mortgages are concerned, many brokers don’t understand that some lenders base affordability on a gross CIS income.

Should You Switch?

If you can find a better deal, then yes, you should consider the option, be that with your current lender or another provider. However, if you do switch to a new lender, you might have to pay valuation and legal fees, as well as a product fee and repayment fees to your current lender, so consider how cost-effective a switch will be before making the move.

Still, whatever your circumstances, be sure to review your mortgage regularly. Even if now isn’t the right time to change your mortgage, you might want to consider the option whenever interest rates, or your circumstances, change in the future.

Get Mortgage Advice

At CIS Mortgage Advice, we help subbys find the right remortgage deal, working with lenders that base their affordability calculation on your gross CIS income rather than net profit, meaning you could borrow up to 5 x more on your mortgage.

Speak To An Expert

If you’re reading this as a Construction Industry Scheme (CIS) contractor, then you or your partner are probably struggling to find a mortgage right now. We can help.

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