What Is Remortgaging?
A remortgage involves making changes to your existing mortgage deal. Here are the key points:
1. Switching Lenders or Rates;
- New Lender: You can switch your mortgage to a new lender altogether.
- Existing Lender: Alternatively, you can stay with your current lender but move to a different interest rate (e.g., fixed-rate, variable-rate).
2. Why Remortgage?
- Expired Deal: When your current mortgage deal expires, you’re usually shifted to your lender’s standard variable rate (SVR), which tends to be higher. Remortgaging allows you to find a better interest rate.
- High Interest Rate: If you’re on a variable rate mortgage, an increase in the Bank of England base rate can raise your mortgage payments. Remortgaging can help you secure a more favorable rate.
- Equity Release: Remortgaging lets you release equity from your property. Use this extra cash for home improvements or to pay off other debts.
- Mortgage Overpayments: Find a provider with flexible terms that allows you to overpay on your mortgage without penalties.
- Increased Property Value: If your property value has risen, your lower loan-to-value ratio might qualify you for better interest rates.
- Offset Savings: If you have cash savings, consider an offset deal where your savings offset against your mortgage debt.
3. When Should You Remortgage?
- Timing: Start exploring remortgage options around three to six months before your current deal expires.
- Avoid SVR: Having a new deal in place before reverting to your existing lender’s SVR ensures you don’t pay more than necessary.
- Early Repayment Charges: While early repayment charges can make early remortgaging expensive, certain situations (like interest rate surges or additional borrowing needs) may still warrant it.
4. How to Remortgage?
- Research: Compare mortgage products across the market with us here at Mortgage Generator.
- Consult Professionals: Seek advice from Mortgage experts.
- Valid Offers: Lenders issue remortgage offers lasting three to six months. Ensure any offer you receive remains valid until your current deal concludes.
Remember, remortgaging is a strategic move. It’s like fine-tuning your financial instrument to play a better melody. So, explore your options, crunch the numbers, and find the harmonious deal that resonates with your financial goals. 🏠🎶