What is remortgaging?
A mortgage is often the largest financial commitment you’ll make, due to the length of time that many mortgage terms last. However, you don’t always have to stick to the same mortgage deal that you initially took out.
Your personal circumstances are likely to change over the course of your mortgage term, therefore it’s important to constantly revaluate your finances to make sure your mortgage deal is the right one for you.
Remortgaging is a move from one mortgage deal to another. This may be done with your current lender, or you may look to move to another one.
How do I remortgage?
In a similar way to how you would shop around for energy rates and broadband deals, you can shop around for mortgage deals to see if you are able to save money and find the most suitable deal for you.
You may find a cheaper mortgage rate and want to switch deal. This is when you would remortage.
Why would I remortgage?
There are many different reasons why you may want to remortgage. Many people remortgage once they come to the end of their initial deal, at this time you would fall onto a standard variable rate (SVR), where you may end up paying a higher interest rate than you were previously.
Other reasons you may want to remortgage include:
- You want to find a better rate than your current one
- You want to move from interest only to repayment
- You want to be able to make overpayment
- You want to borrow more money
Things to consider
There are a few things to think about before going ahead with switching to a new mortgage deal:
- Be aware of product fees involved in mortgage deals, as they can often counteract the savings that could be made by remortgaging.
- Your lender may charge an early repayment fee for paying off your current deal before switching to a new one, which may also counteract any remortgage savings.
- Even though you already have a mortgage, lenders are likely to carry out the same affordability checks as when you first took it out. Make sure you are mortgage ready and your finances are in good shape.
- Speak to a mortgage adviser. Advisers have access to a large amount of lenders and can search many mortgages, including exclusive mortgage deals not available on the high street. This can save you time and possible even more money when it comes to remortgaging.
Thinking of remortgaging? Speak to a specialist adviser today on 0800 652 6649 or [email protected]
You may have to pay an early repayment charge to your existing lender if you remortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.