A Complete Guide to Remortgaging: What You Need to Know.
Remortgaging can potentially help homeowners save money, secure better interest rates, or release equity from their property. In this guide, we’ll cover everything you need to know about remortgaging, including when it may be beneficial to remortgage and how to get started.
What is Remortgaging?
Remortgaging is the process of switching your existing mortgage to a new deal, either with your current lender or a new one. This could potentially help you take advantage of better interest rates, reduce your monthly payments, or borrow additional funds.
When Should You Consider Remortgaging?
Here are some common situations where it might be a good idea to remortgage:
- Your fixed-rate deal is ending – Once your fixed-rate period expires, you’ll typically move to your lender’s standard variable rate (SVR), which is often higher. Remortgaging can help you secure a new deal. We would recommend looking at remortgaging 6 months prior to your fixed rate ending.
- You want a better interest rate – If market rates have dropped or your credit score has improved, switching could lower your monthly payments.
- You need to borrow more money – Remortgaging can allow you to release equity from your home for renovations, debt consolidation, or other financial needs.
- Your property value has increased – A higher home value could qualify you for better mortgage terms.
- You want to switch to a different type of mortgage – Some homeowners remortgage to move from an interest-only mortgage to a repayment one or vice versa.
If you are looking to remortgage before the end of your current deal it is important to consider any early repayment fees you may incur.
Benefits of Remortgaging
Remortgaging may have several advantages, including:
✅ Lower interest rates – A lower rate can reduce your monthly repayments.
✅ Savings on monthly payments – Switching to a better deal can save you hundreds or even thousands over time.
✅ Flexibility – Some mortgages offer terms more suited to your circumstances, such as overpayment options or shorter loan terms.
✅ Access to extra funds – You can release equity to fund home improvements, investments, or other expenses.
How to Remortgage: Step-by-Step Process
- Check your current mortgage deal – Review your current mortgage terms and any early repayment charges.
- Assess your financial situation – Check your credit score, income, and expenses to determine your eligibility for a new deal.
- Compare mortgage deals – your mortgage broker will compare lenders to find the right mortgage deal for you.
- Apply for a new mortgage – Once you’ve agreed the right deal, your mortgage broker will submit your application.
- Go through the valuation process – The lender will assess your property’s value to determine loan eligibility.
- Complete the legal process – A solicitor or conveyancer will handle the legal paperwork.
- Switch to your new mortgage – Once approved, your new mortgage will replace your old one, and you’ll start making payments under the new terms.
Things to Consider Before Remortgaging
- Early repayment charges – Some lenders charge a fee if you leave your mortgage before the agreed term.
- Arrangement fees – New mortgage deals may come with arrangement or valuation fees.
- Credit score impact – Your credit history will influence your mortgage options. You can sign up to view your credit report at Check my file. Please be aware there maybe a charge to do do.
- Long-term savings vs. short-term costs – Ensure that the benefits of remortgaging outweigh the associated fees.
Early Repayment Fees: What You Need to Know
If you decide to leave your current mortgage deal before your fixed-term period ends, you may have to pay an early repayment charge (ERC). This fee is typically a percentage of your outstanding mortgage balance and can vary depending on how much time is left on your fixed deal. For example, an ERC could be around 1-5% of your loan amount, meaning it could be a significant cost. Before making the switch, it’s crucial to check the terms of your existing mortgage and calculate whether the savings from remortgaging outweigh any early repayment fees. Seeking expert mortgage advice can help you navigate this and find the best solution.
Is Remortgaging Right for You?
If your fixed rate is coming to an end it is essential to look into your remortgage options. Seeking expert advice can help you make the right decision based on your financial situation.
At Complete Mortgage Advice, we specialise in helping homeowners find the right remortgage deals tailored to their needs. We are experts in considering all aspects involved in your remortgage and filter through all the lender products available to you to ensure you secure a mortgage that is right for your circumstances.
Get in touch today for expert guidance and see how much you could save! 📩
Tom Boulden
Mortgage Broker
📞 01752 905011
📧 info@completemortgageadvice.co.uk
🌐 www.completemortgageadvice.co.uk
Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
