Remortgages

Thinking about remortgaging? While it can seem like a straightforward process, it’s easy to get confused with all the potential options. You might not be sure that remortgaging is the best way forward, or whether there’s a better route for what you’re actually trying to achieve — talk it through with one of our advisors before deciding.

What Is a Remortgage?

With a remortgage, you simply take out a different or new mortgage on a property you already own. This could be through your current lender, or by switching to a new one for a more suitable product.

There are many reasons people remortgage, including:

• Securing a better rate
• Releasing cash from your home, for example for debt consolidation or home improvements
• Reducing the length of your mortgage term

What Are the Benefits of Remortgaging?

One of the most common reasons to remortgage is to secure a better interest rate — either with a new lender or your existing provider. This is typically done as a current fixed-rate deal nears its end, and can meaningfully reduce monthly repayments.

Remortgaging can also let you borrow more. The maximum loan-to-value you’ll be offered largely depends on how you plan to use the funds — whether that’s paying off existing debts, buying another property, or making further home improvements. The lender’s risk is limited by capping how much they’ll lend against your property’s value (the loan-to-value ratio).

Not sure which option applies to you? Get in touch for a free consultation and we’ll talk through what’s realistic for your situation.

Can I Remortgage to Downsize or Buy a Second Property?

Yes — this is another common reason for remortgaging. By releasing further equity from your current home, you may be able to secure a new mortgage product for another property while keeping your existing home as an investment, for example as a buy-to-let.

When Is the Right Time to Remortgage?

This depends largely on your reasons for remortgaging, but one key factor is your lender’s standard variable rate (SVR) — the rate your mortgage moves to once your initial rate period ends. It’s worth exploring new mortgage options around 14 weeks before that initial period finishes, since finding the right deal can take time.

Should I Remortgage Right Now?

If you’re weighing up whether now is the right time, keep early repayment charges (ERCs) in mind — these will always increase the overall cost. If ERCs aren’t a factor for you, it often makes sense to lock in a deal sooner rather than later, since rates can rise while you wait.

You can technically remortgage at almost any time, but doing so early may mean extra charges from your current lender. Most people need to have lived in their home for at least six months before remortgaging, though there are exceptions — for example, an inherited property, or a sibling buying out another family member’s share. Given how much nuance is involved, it’s worth getting expert advice before making a decision.

How Often Should I Remortgage?

You may have heard that you should remortgage every two years — but that’s only true if two years happens to be your fixed-rate period. Deals on the market range from short to long-term, though in most cases you’ll save money by switching before your rate reverts to the lender’s standard variable rate.

As a general rule, it’s worth reviewing your options whenever your introductory rate is due to end — these periods typically run anywhere from two to ten years. Remortgaging at that point can help you lock in a favourable rate all over again.

Is a Remortgage Right for Me?

Every situation is different, and the right answer depends on your goals, your current deal, and your timing. Contact us today and a member of our team will be happy to talk through the options