Remortgaging is when you replace your current mortgage with a new, and preferably better, deal. Doing this at the end of your fixed-rate period can save you thousands of pounds a year in interest – if you don’t remortgage you’ll move onto your lender’s Standard Variable Rate and your monthly payments will likely increase significantly. You can remortgage with your current provider, but just like shopping around for the best broadband or car insurance deal, you’ll likely get a better rate if you switch to a new lender. There are other reasons you may want to remortgage, such as releasing equity to pay for home improvements or taking advantage of low-interest rates. In this guide, we’ll explain why you should remortgage and everything you need to know to make the right decisions along the way.
Why Should I Remortgage?
One of the main reasons people remortgage is to get a better deal in place before being moved onto the higher default interest rate at the end of their fixed-rate period. However, there are several other reasons to remortgage which we’ll outline below. For a more detailed look at the reasons to remortgage click here.
You can remortgage to:
- get a new fixed-rate deal before being moved on to the Standard Variable Rate
- release equity as tax-free cash to fund home improvements or consolidate debts
- take advantage of increased property value and get a better deal
- take advantage of low interest rates and get a better deal
- get a shorter or more flexible deal that allows you to pay off your mortgage sooner
- move from an interest-only mortgage to a repayment mortgage
When Should I Remortgage?
The best time to remortgage is usually at the end of your current fixed-rate deal because otherwise, you could end up paying thousands more each year on your lender’s default rate. We advise you to book your free chat with us 3-6 months before your fixed-rate period ends so we have enough time to find you a better deal – but if you’ve left it later than this don’t worry, we can still help you! You can remortgage before your fixed-rate deal ends but your lender may charge you an early repayment fee to do this, which could cancel out the potential savings of remortgaging. If you’re thinking of remortgaging early then please chat with one of our friendly advisors for free and we’ll help you work out whether it’s a cost-effective move.
How Does Remortgaging Work?
If you remortgage with your current lender, without borrowing more money, it’s a fairly simple process as you would have already qualified for the original deal. However, if you want to borrow more money or if you want to switch to a new lender to get a better deal, it’s essentially like taking out a new mortgage. You’ll have to pass affordability and credit checks but we’ll choose a product that you’re very likely to be accepted for and apply on your behalf. Once your application has been accepted, your new lender will pay off your current mortgage and set up your new deal. The potential savings make the effort very worth your while, and we’re here to make the switch easy and stress-free for you.
How Much Does it Cost to Remortgage?
There are usually some fees involved with remortgaging, but the relatively small upfront costs are worth it if you save thousands each year with a better deal. We’ve listed below all the fees that can be involved with remortgaging, but you may not have to pay all of these, as your new lender will usually cover some of them for you. Also, some products that come with an ‘arrangement fee’ or ‘product fee’ have lower interest rates and therefore work out cheaper in the long run. Booking in for your free consultation is the best way to truly understand your options and find a great deal, but if you’d like a more in-depth guide about the cost of remortgaging click here.
- Early-repayment Fee
- Valuation Fee
- Solicitor Fee
- Mortgage Arrangement/Product Fee
- Mortgage Broker Fee
How Do I Find a Good Remortgage Deal?
Even if you’re thinking of staying with your current lender, if you’re approaching the end of your fixed-rate period now is a great time to find out what deals are available to you, as you’ll likely be able to save money by switching providers. To find the right remortgage deal for your circumstances speak to a whole of a market mortgage broker who understands the criteria of each lender, as they’ll be able to shop around on your behalf to see what products are available to you. Your initial chat with us is completely free, so you’ve got nothing to lose and potentially a lot to save!
The Bottom Line
It’s important you remortgage when your current fixed-rate period ends otherwise your monthly repayments will likely increase considerably on your lender’s default rate. Come and speak to us 3-6 months before your fixed-rate period ends and we’ll see what deals are available to you. Remortgaging can also be a good way to release equity from your property, or take advantage of low-interest rates or increased property value. Although you can stay with your current lender, you should be able to save money by shopping around for a better deal, so take this chance to look at your options.
We’ve been helping our local community with remortgages for over 30 years! As the whole of market mortgage brokers, we have access to thousands of great products and we understand the criteria of each lender – meaning we should be able to find a great deal that suits your needs perfectly. We’ll also guide you through the process and liaise with your lenders to make the switch easy for you.
Book your FREE consultation with one of our friendly advisors to get going quickly – this can be done remotely via phone or video call if you’d prefer. We look forward to helping you!
