As your financial circumstances evolve, your mortgage preferences are likely to change too. Even a mortgage deal you took out two years ago might not be right for you now. Remortgaging gives you the flexibility to rebalance your finances and change your current mortgage without moving home. However, as with any big financial decision, it should be planned carefully. Here are the key things to consider when planning to remortgage.
- Your current mortgage deal is about to end and you don’t want to be moved onto your lender’s standard variable rate (SVR), as it’s usually much higher.
- You want to release equity and free up cash, for example, to consolidate debts or pay for home improvements.
- You want to reduce your monthly repayments to make them more affordable or allow you to save more.
- The value of your home has increased and you want to move into a lower LTV bracket with a lower interest rate.
- You’re worried about interest rates rising and want the stability of a fixed interest rate.
- You want to change the type of mortgage you’re on – maybe your financial circumstances have changed and you’d like to overpay more than your current deal allows.
Remortgaging isn’t right for everyone. If your home has decreased in value, your circumstances have changed for the worse, you don’t have much left to repay, or you could incur significant fees, you might not have anything to gain by remortgaging. To work out if remortgaging would benefit you, speak to a mortgage adviser.
How do I remortgage?
You can either remortgage with your existing lender (known as a product transfer), or switch to a different deal with a new lender. The choice is yours and there are pros and cons to both decisions. Product transfers may take less time and save you fees, as you shouldn’t need to involve a conveyancing solicitor, however, you may miss out on better deals elsewhere in the market. An experienced mortgage adviser can help you find the right mortgage for you. With Moneybox Mortgage Advice, you can get free, impartial advice and access to over 90 lenders. You can also complete your mortgage application from start to finish, all from within the app.
When should I remortgage?
If you’re looking to remortgage, it’s best to start the process early and not wait until your current mortgage deal ends. It could be worth exploring new deals three to six months in advance, as it can take time to find and apply for the right mortgage and many remortgage deals are valid for this period of time. Your current lender will probably contact you around three months before your deal is due to end to show you their product transfer offers.
What should I do before remortgaging?
- Find out if you can remortgage – You might have to pay a costly early repayment charge if you remortgage before a certain date, and sometimes an exit fee. Get in touch with your current lender to check if and when you’d be allowed to remortgage.
- Estimate your property value – Look at Zoopla and Rightmove to see how much similar properties in your area have recently sold for, or get an official valuation from an estate agent.
- Know your current equity and mortgage balance – You can find this out by contacting your lender or checking your most recent mortgage statement. This will help you work out your current LTV and the deals you might be eligible for.
- Research all your options – Check if your current lender could offer you a great product transfer deal, or speak to a mortgage adviser who can compare a wide range of deals to find you a gem. You can also search comparison sites to find available deals.
- Check your credit score – Get ahead of lenders by looking at your credit report to see if you could improve your credit score.
- Prepare your paperwork – Getting your key documents together, including proof of your income and current equity, will help speed up the mortgage application process when the time is right.
Moneybox Mortgage Advice is provided by Moneybox Mortgages Ltd.
Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.