With interest rates at an all-time low, falling from 0.25% to 0.1%, you might be wondering if you could secure a better deal on your mortgage. It might not be a great time for saving your money, but it could be an excellent time for borrowing.
You may have heard of remortgaging before but never really delved into the details. Put simply, remortgaging is when you move your mortgage from one place to another. This could be with the same lender or with a different lender. Remortgaging allows you to change the terms, interest rate, repayment period and more.
Mortgages tend to be the biggest financial commitment you’ll ever make, so it makes sense to check you’re always on the best possible deal. Remortgaging comes with fees, so you won’t want to remortgage as often as you might change broadband packages. But it is certainly worth looking around to see what is available – particularly when interest rates are low.
Just because you already have a mortgage, it doesn’t mean you will be automatically accepted. You’ll need to consider your financial position and if changes to your mortgage could derail your repayments.
Remortgaging is essentially applying for a new mortgage, paying off your existing mortgage with the new mortgage, and then continuing to make payments on the new mortgage. You might do this to secure a better deal, to release some equity from your home, or because a fixed-rate mortgage has come to an end.
Just as you would shop around for the best possible deal on your utility bills, you can also use remortgaging to secure a better deal on your monthly mortgage repayments. You could also pay back your mortgage sooner by switching to a lender that allows over-payment without a penalty.
If you’re considering a remortgage, speak to a specialist mortgage broker to find out how they can help you secure the best possible deal.
Remortgaging is not something you should do on a whim. You need to consider your financial situation and make sure you won’t be losing out as a result of the changes. If you do find a cheaper mortgage, consider the following before making the switch.
Remortgaging isn’t as simple as switching your Sky package, so you should only consider doing it when it is of most benefit to you. This could include:
The most common reason for remortgaging is when your fixed-rate mortgage comes to an end. The most common term is 2, 3 or 5 years. After this period, you will be moved to a standard variable rate.
With this type of mortgage, your payments could go down with interest rates, but they can also go up. If you want stability and some reassurance that your repayments will always be affordable, you can look for another fixed-rate mortgage.
Curious about remortgaging? We help homeowners navigate this complex area and secure the best possible deal. Find out more about remortgaging with Niche Mortgage Info here.