What is furlough?
Furlough is something that many have become familiar with during the last year.
If an employer has less work for you because of COVID-19, they have options to access a Coronavirus Job Retention Scheme grant to help them to carry on paying you. It means that you’ll get at least 80% of your normal pay, with some employers rounding that up.
This is known as furlough or flexible-furlough depending on your arrangement with your employer.
But what does this change in circumstance mean for your chances of remortgaging and saving on your current deal?
Mortgages & Furlough
As is often the case when you first get your mortgage, remortgaging will take into account things like affordability, employment, wages etc. when you look at your options.
The good news is that many specialist and high-street names are accepting applicants who are on furlough.
(Correct as of 19.02.21)
Many homeowners remortgage when their mortgage is no longer on the fixed rate. This is the deal you agree to when you get your mortgage. An example would be “3 years fixed at 2.7%” – this refers to your interest rate during the first 3 years of your repayment plan.
Slipping onto your lenders SVR (Standard-Variable Rate) after your initial deal may mean that your monthly payments go up (or occasionally down) but many like the certainty of knowing exactly what their monthly payment will be.
Remortgaging on Furlough and our free service
To help those looking at remortgaging whilst furloughed, Mortgage Buddy and our partner advisors are offering a free Mortgage MOT service.
With this service, your advisor will be looking at the condition of your existing mortgage.
They’ll look for:
- Opportunities for saving on your mortgage
- The earliest point to renew or reevaluate your mortgage deal
- Products that may be a better fit for you
- Insurances and cover that may have expired or could be improved
You’ll be matched with an FCA approved mortgage advisor.
Advisors are whole-of-market and act with your best interests in mind, they have no obligations to any lenders and will explain your options fully.