When is Remortgaging a Good Option?
Remortgaging can feel like a somewhat complicated and time consuming endeavour. It is where you pay off an existing mortgage and switch to one with a different lender, something that many people think involves too much hassle to be worth it. Yet there are many advantages of remortgaging.
It is not for everyone, but there are a number of times when thinking about remortgaging is a good idea. Plus, the whole process can be incredibly smooth and easy.
To Save Money
The main (if not only) reason people decide to remortgage is to save money. Switching to a mortgage with a lower interest rate will save you a lot of money over time, assuming the early repayment charges are not excessive. Those who own less than a quarter of their home or already have a good deal will find it hard to get a money saving remortgage. Still, if you need to free up some money for other purposes then this strategy can still be a good option.
Moving home offers the ideal opportunity to remortgage, as there will be a lot of differences between your new and old property. This would likely mean you’d have to adapt your existing mortgage anyway, presenting a chance to switch to a better lender. Various lenders also offer better mortgage deals to new customers and those remortgaging too.
When One Deal Ends
A lot of mortgages only last between two to five years, so when they run out you will have a choice. Either stick with the same lender and arrange another mortgage, or go to one of their rivals that are offering one with a much lower rate of interest. Otherwise it is likely that your existing lender will put you on their standard variable rate (SVR) mortgage, which will be higher than many others that are available.
The property market is constantly changing, with house prices continuing to rise at a rapid rate. If the value of your home has increased a lot since you first took out a mortgage then you may be eligible for one with much lower rates. It is also worth checking any financial news, as if you believe the national interest rates, set by the Bank of England, are due to go up, then it can affect your mortgage payments. In this case you should look around for mortgages with a lower rate.