Time to consider your remortgaging options?

Making this informed decision is just as critical as making your initial mortgage choice

When you remortgage, you switch from your current mortgage agreement to a new one on your existing property. This process can involve negotiating a new deal with your existing lender or exploring potentially more favourable options with an alternative lender. Considering that your mortgage is likely one of your most substantial financial commitments, it’s crucial to approach remortgaging with the same level of diligence and consideration as when you first chose your mortgage.

Making an informed decision can have significant long-term financial benefits, ensuring your mortgage aligns with your current and future financial situation and goals. Choosing the right deal is essential, as you’ll typically be tied into it for several years. That is why you should obtain professional mortgage advice to consider all aspects of a potential deal, including interest rates, fees, and the flexibility of terms.

Why should i consider remortgaging?

Remortgaging is a financial decision that offers numerous benefits. As your current mortgage term nears its end, you may find yourself automatically rolled onto your lender’s standard variable rate (svr), which is often substantially higher than other available rates. Avoiding the costly svr is a key motivator for many homeowners to explore remortgaging options.

Unlocking funds and increasing borrowing

One reason to remortgage may be to increase your borrowing capacity to free up funds for significant expenditures. Whether you’re planning to move home, embark on a major home improvement project, or need to fund your child’s school fees, remortgaging can help release the equity tied up in your property. It also offers an opportunity to consolidate debts or invest in a buy-to-let property, making it a versatile financial tool.

Reducing monthly payments

Some homeowners seek to remortgage to secure a more competitive deal, thus reducing their monthly mortgage repayments. This can make their mortgage more manageable, leaving them with extra monthly disposable income. While exit fees may be associated with leaving their current mortgage deal, the long-term savings may outweigh these costs, making it a financially sound decision.

Overpaying and managing interest rate changes

Your financial situation might have improved, allowing you to overpay your mortgage. By switching to a lender that permits larger overpayments, you could pay off your mortgage faster and save on interest. Additionally, if you’re on a variable rate mortgage and the bank of england base rate changes, it might be the perfect time to shop around for a more competitive rate.

Capitalising on increased property value

If your property has appreciated in value, you might benefit from a lower loan-to-value (ltv) ratio, which could qualify you for a more attractive mortgage rate. This is particularly advantageous for homeowners looking to reduce their interest rates and monthly payments.

Fixing your payments for financial certainty

For those anticipating changes in circumstances or facing potential interest rate hikes, remortgaging to a fixed-rate deal can provide certainty in your monthly mortgage costs. This stability can be crucial for budgeting and financial planning, ensuring that your mortgage remains affordable in the long term.

Considering mortgage porting when selling

If you’re selling a property with an existing mortgage, you may need to decide whether to port your mortgage to a new property or pay it off and switch to a new deal. Each option has benefits and considerations, and seeking professional advice can help you determine the best course of action for your situation.

Understanding the optimal timing

Generally, it’s advisable to start exploring your remortgage options three to six months before your existing deal concludes. Opting for the earlier side of this range, such as six months, gives you ample time to secure the most favourable deal for your circumstances without the stress of your current deal ending imminently.

Many mortgage lenders offer a six-month mortgage offer period, enabling you to lock in a new mortgage deal well before your existing one expires. This foresight ensures continuity and financial security.

Ready for a discussion about your remortgage requirements?

Contact our expert team for personalised advice and to explore your remortgaging options. We’re here to assist with your mortgage needs and guide you through the process to ensure you make the best financial decisions.