When your mortgage deal is coming to an end, many people will either renew the deal with their current mortgage provider or will get a new deal based on the price that you paid for the house originally. However, house prices can change drastically within the space of a few months, let alone a few years.
It is worthwhile getting your home valued a few months before you look for a new mortgage deal. Lenders will assess your current loan-to-value rate, which is basically a ratio that shows the amount of money outstanding on your home to its market value. They will then use this ratio to determine how much you can borrow and the interest rate that you are charged for doing so.
Therefore, if your house price has gone up drastically since you purchased it, then your money outstanding is going to be a lot less than the current market value. Experts say that the ideal loan-to-value rate is 50% or under but anything under 60% will get you the best deal on remortgages.
What if Your House Price has Decreased?
If the opposite has happened and your price has decreased, then you may not be so lucky as when this happens, your loan-to-value ratio is going to increase.
However, even if your loan-to-value ratio has increased, which can be expected in an uncertain economic climate, don't despair! Our team of mortgage advisors are beacons of knowledge when it comes to mortgages and finance. They can search thousands of products until they narrow down some great deals that fit you and your circumstances.
How You can Find your Loan-to-Value Ratio
The simplest way to find out your Loan-to-Value ratio is by dividing your outstanding mortgage amount by your property's current value, then multiplying it by 100!
