People typically remortgage for two reasons – to save money and / or to raise funds. To work out whether remortgaging would be beneficial in any given situation, the benefits have to be weighed up against any costs, ie any advisor, solicitor or provider fees. The guide below lists some of the main reasons our customers come to us for their remortgage needs:
If your fixed rate has finished and you have been put on a standard variable rate, in most cases you will be able to find a much better rate elsewhere. Even if your fixed rate hasn’t yet finished, it may still be beneficial to switch to a lower rate (especially if you have a hefty mortgage), but any additional early repayment fees would have to be taken into account.
Mortgage companies offer different rates based on the loan-to-value, ie if you have a mortgage for just 50% of the property value you should get a better rate than if you had one for 80%. If the value of your property goes up significantly then you could find yourself in a lower band making you eligible for better rates.
If you’ve come into some money, ie due to an inheritance or pay rise, you may want to pay off an additional chunk of the mortgage or pay more per month. In many cases, your existing lender will allow you to do so, but if you want to pay off more than they allow then it may make sense to remortgage.
If you have a repayment buy to let mortgage for example and wanted to switch to interest only, you may struggle to get an agreement with your lender. In this case, you would need to remortgage with a different product or lender. Switching from interest only to repayment is usually easier.
Remortgaging with a new lender can help you raise money on relatively low rates, for example to fund home improvements or a new car. However the total cost of the borrowing should always be taken into account – borrowing at a lower rate for a longer time period can actually end up costing much more overall.
Our advisers are here to help with all of your remortgaging queries.
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