With inflation on the rise, the Bank of England is expected to continue increasing the base rate incrementally over the coming years. If you’re on a variable or tracker mortgage, you’re likely already experiencing higher monthly repayments, which will likely keep increasing in the months ahead. If you’re on a fixed-rate deal, you may be safe for now, but when your deal ends your repayments could rise dramatically. Remortgaging to a new fixed-rate deal could enable you to take advantage of today’s rates and potentially save thousands of pounds in interest over the coming years. In this guide, we’ll explain how you could save money by remortgaging and give you specific advice based on your situation.
What is Remortgaging and How Could It Save Me Money?
Just as some people shop around at the end of their broadband or car insurance contract to find a great deal, you can ‘shop around’ at the end of your fixed-rate mortgage deal (or during it) to find a better rate – this is called remortgaging. However, you don’t actually have to do any of the shopping around, as your mortgage broker will do this for you and find out if there are money-saving deals are available to you. Your broker will also work out which products you’re likely to be accepted for – which is important because being rejected can damage your credit score.
As your mortgage is likely to be the biggest single expense you have, shopping around for a lower rate could produce the biggest savings – potentially thousands of pounds a year. The actual process of remortgaging is similar to taking out a new mortgage because that’s essentially what it is. Once we find you a better deal from a new lender, you’ll then need to pass their affordability and credit checks. If you’re accepted, your new lender will pay off your old mortgage and transfer the loan onto their books.
Your mortgage advisor will handle most of the work for you – not only will they search the market to find the right deal for you, but they’ll also make the switch effortless by liaising with your lenders and solicitor. Even if your circumstances have changed, there’s no need to worry about damaging your credit score or losing your current mortgage, because your advisor can see what deals are available to you without running a credit check. Our mortgage brokers have access to thousands of great products from hundreds of lenders, and it’s completely free to see what deals are available to you and how much you could save before deciding whether to remortgage – simply book in for your FREE no-obligation consultation to find out. If you decide to remortgage to reduce your monthly repayments, there may be a small, one-off broker fee payable. To learn more about remortgaging, please read our guide, ‘How Does Remortgaging Work?’
Should I Remortgage if My Fixed-Rate Deal Has Ended?
Even if interest rates were not expected to rise further, it would still be a good idea to remortgage if your fixed-rate deal has ended. Your lender would have moved you onto their higher Standard Variable Rate at the end of your fixed-rate period, meaning you could be paying hundreds of pounds more than you need to each month. In most cases, we’ll be able to find you a much better deal and save you a lot of money – and the fact that interest rates are expected to rise makes it even more important to act now so you can lock in a new fixed rate for a number of years. Even if your circumstances have changed since taking out your original mortgage and you now have bigger debts or less income, it’s still likely you can get a better rate than the Standard Variable Rate you’re currently on.
Should I Remortgage if My Fixed-Rate Deal is About to End?
It’s most common to remortgage to a new fixed-rate deal when your current one ends so you don’t have to pay more interest than you need to on your lender’s higher default rate. The best time to look into remortgaging is 3 – 6 months before your fixed-rate deal ends – speaking to a mortgage broker within this window allows enough time to find the right deal and make the switch before you’re moved onto the higher Standard Variable Rate. Again, the fact that interest rates are expected to rise futher, means it’s even more important to get your new fixed-rate deal locked in to take advantage of the mortgage rates currently on offer. If you have left it a bit late and your fixed-rate period is just about to end or has already ended, we can still help you move to a better deal before you waste too much money.
Should I Remortgage if I’m Part Way Through a Fixed-Rate Deal?
If you are part way through a fixed-rate deal, any interest rate hike won’t immediately affect you. However, when you come to remortgage in a year or two, it’s likely that today’s mortgage deals will no longer be available. With this in mind, you may be able to save money by terminating your current mortgage early and locking in a new fixed-rate deal before rates rise too much. One thing to bear in mind though is that you may have to pay an early repayment charge (ERC), so check your contract to see if an ERC applies to you, and if so, how much it’ll be. Even if you do have to pay a fee, it may still work out cheaper to lock in a new fixed-rate deal at today’s rates, and you can find out which option makes most financial sense by chatting to us for free. During your FREE no-obligation consultation, we’ll see what deals are available to you, work out what it would cost you to switch, and then do some calculations to find out if you could save money by remortgaging early.
The Bottom Line
It’s usually a good idea to remortgage at the end of your fixed-rate deal so you don’t end up paying more interest on your lender’s higher Standard Variable Rate. We recommend speaking to us 3 – 6 months before your current fixed-rate period ends if possible. This could be one of the most financially savvy things you do as a homeowner – potentially saving you thousands of pounds a year in interest. And with interest rates expected to rise further, it’s now more important than ever to act quickly. Whether your fixed-rate deal has already ended, is about to end, or you still have a year or two left, you could still save a lot of money by locking in new fixed-rate. You can find out whether you can save money, and how much you can save, by booking in for a FREE no-obligation consultation. If we find you a great deal and you’re happy to proceed, we’ll make the switch for you as hassle-free as possible.
We’ve been helping our local community with remortgages for over 30 years! We search thousands of products to find a deal that suits your needs. We’ll also guide you through the process and liaise with your lenders and solicitor to ensure your remortgage goes smoothly.
Book your FREE no-obligation consultation with one of our friendly advisors to get going quickly. We have offices in Frimley and Basingstoke, or we can help you remotely via phone or video call if you’d prefer. We look forward to chatting with you!
