For most people, a mortgage will be one of life’s biggest financial commitments. But whilst many of us will shop around for the best deal when it comes to the newest gadgets and devices, few people give the same thought or time to a mortgage.
Despite what some may think, you do not necessarily have to stay on the same mortgage product that you took when you bought your home. It may be worthwhile periodically reviewing your circumstances and determining if there may be a better deal out there for you.
What does remortgaging mean?
In simple terms, remortgaging is when you switch your existing mortgage deal to another, either with the same lender or a different one.
Why would I want to remortgage?
Remortgaging can potentially lead to large savings on monthly payments. But there could be other reasons you may wish to consider it.
Here are some things to consider….
- Your current deal is ending.
When you first take out a mortgage you may get an introductory deal such as a low fixed interest rate, or a low tracker rate. These products generally allow you to have between 2 and 5 years of lower payments. Once the deal ends your lender will automatically move you onto its standard variable rate to continue the mortgage which may in turn cause your payments to increase. However there may be other lenders or deals open to you which could allow you to maintain or even reduce your payments. Therefore its always worth being aware of the date that your current deal is due to end, and have a look at the market to understand and review your options.
As a customer of Mortgage Advice Bureau, we always aim to contact our existing clients from around 12 weeks before their renewal date to offer our assistance.
2. Looking for a better interest rate
Even if your mortgage isn’t on a fixed term, or due to be renewed, you may simply want to review your current deal in line with your circumstances and see if there are better products available for you. It’s worth noting that some lenders may charge you a fee if you plan on switching your product early. This doesn’t necessarily mean you should dismiss the idea of remortgaging, as large savings can be made. It simply means you should understand any penalties, and weigh them up with any potential long-term benefits. Everyone’s situation will be different.
3. Looking to borrow more money
You may wish to borrow more money to pay home improvements or to consolidate debt. Again your existing lender may be able to do so, but you may find a better rate somewhere else. The key is to do your research and make sure you weigh up the pros and cons of any fees in order to make an informed decision.
If you have any more questions around remortgaging, or would like additional information, our expert team are on hand to assist. We would be happy to discuss your individual circumstances and help you determine whether this may be something beneficial and worth considering.