How long ago did arrange your current mortgage?
If the answer is “Years ago”, or “When I bought this house”, or a combination of the two, then you could be wasting thousands of pounds on your mortgage and it’s time you took a moment to see if you could get a better deal on your mortgage by remortgaging. Click here to request help from a professional mortgage consultant, or read on to find out more about what's involved in arranging a remortgage....
Remortgaging means changing to a new mortgage that offers a better interest rate or more flexibility than your current mortgage. Usually people remortgage with a different mortgage lender from the one they have their existing mortgage with. You have to go through some of the same steps as you would if you were moving home, but it should be less stressful. And if a remortgage means you save money, then surely it’s worth while!
If your home has increased in value since you took out your last mortgage, then remortgaging can provide an opportunity to release some of the equity in your property. For example, if your house is now worth £100,000 compared to £80,000 when you bought it, and your current mortgage is for £70,000 you should easily be able to borrow an additional £20,000 to spend on home improvements, a holiday, a new car, or whatever else you want.
Alternatively, if you have other debts, such as credit cards or personal loans, you might want to use some of the money tied up in your house to clear these expensive debts. This is called a debt consolidation remortgage, and can be a useful way of reducing your total monthly outgoings.
When looking for a remortgage, there are a number of options to pick from, just as there were when you arranged your present mortgage.
If you like the idea of knowing what your mortgage payments will be each month for a fixed period of time, then a fixed rate remortgage could be the answer for you.
If you want to know the maximum you’ll pay each month, but still want to be able to take advantage of any decrease in mortgage interest rates, then you might want to opt for a capped rate remortgage.
Or if you want a reduced payment in the short-term, you could consider a discounted rate remortgage.
The relatively new style tracker remortgages, have their interest rates linked directly to the Bank of England Base Rate, so you are sure to get the immediate benefit of any reductions in interest rates. On the other hand, though, if the Bank of England raise rates, the increase will hit you straightaway.
Remortgaging to get more flexibility is becoming increasingly popular, given the increase in the number of flexible remortgage products that have become available in recent years. A flexible remortgage gives you the ability to make regular or lump-sum overpayments to your mortgage, temporarily reduce your mortgage payments, take a payment holiday, or change your mortgage repayment term.
With so many choices available to you, it can be hard to decide which remortgage choice is right for you. Normally your main consideration is the interest rate. Anyone who is currently paying their mortgage lender’s standard variable mortgage rate, is likely to save money with a special offer remortgage such as a fixed, capped or discounted remortgage.
There are some costs associated with arranging a remortgage. Although you are not moving home, you will still have to pay for your legal costs, although a number of mortgage lenders offer to pay them as part of your new remortgage deal. The new mortgage lender will want to carry out a mortgage valuation on your property to confirm what it is worth. Normally you will have to pay for this although, again, some banks and building societies will cover the costs for you as part of their package of remortgage offers. There is no stamp duty payable for a straight forward remortgage, as you are not purchasing a new property.
The first step towards seeing how much you could save by remortgaging is to fill in our online remortgage enquiry form. We will then pass your details to a specialist remortgage broker who will be able to offer you a number of remortgage options to consider.