The cost can vary depending on your home and current situation. Staying on the same mortgage product for the entire term of your mortgage would be incredibly rare, and most people will shop around to find a better deal once their fixed term comes to an end.
If your circumstances change at any point during your mortgage term, you might think about increasing or lowering your payments. Likewise, if you decide you want to release equity from your home for improvements or big expenses, you will need to remortgage. Before making any big financial commitments, you need to ask: how much does it cost to remortgage?
While you might save money on your monthly repayments, with fees and other expenses to consider, you might not be saving money in the long term. Read on to learn about the expenses associated with remortgaging
The first thing to consider is the cost of remortgaging. You might be drawn in with the temptation of lower interest rates, but if the fees are added to the final mortgage amount, this could lengthen the mortgage term, and increase the amount you pay overall.
These fees won’t apply to every application, as all lenders are different, but you can expect to face a few of these remortgage fees throughout the stages of the application. Remember that your time is also valuable. Remortgaging is an involved process that will require you to prepare financial information, just as you did for your initial mortgage application. Consider this in your affordability calculations.
The arrangement fee is paid to the lender to set up the new mortgage. You may also see it referred to as the product fee. The arrangement fee will vary by lender, but you can expect to pay a higher arrangement fee with a lower interest rate.
Lenders might charge this as a lump sum upfront, or they might add this to the mortgage. Paying upfront might be a bit of a shock to your finances, but the alternative is to pay it with your mortgage. This means there will be interest added to the payments. More info about this here.
You already own the home, so you don’t need to go through the usual transfer of ownership. But you will need to legally change the details of the lender. This means you’ll need to instruct a solicitor or conveyancer to handle the paperwork on your behalf. If you were happy with your solicitor from your original mortgage application, they may offer a discount for handling your remortgage.
Before you can remortgage your property, you will have to pay for a valuation. This will work to your advantage if you are hoping to release equity from your home. Some lenders include the valuation in their fees, but others will charge this as a separate fee. Make sure you check with the lender so you don’t get caught out with unexpected charges.
When you pay off your mortgage early, some lenders will charge a fee. Check the fine print to find out if you will be subject to these additional charges. If you are remortgaging in the middle of a fixed-term deal, you will be subject to the early repayment charge. But once you move onto the standard variable rate, the ERC will no longer apply.
If you work with a mortgage broker to find the best possible deal on your remortgage, they will charge a lump sum fee. This might feel like an added expense you can do without, but choosing to work with a broker has its obvious advantages. When you go straight to your bank or other lenders, you might not be offered the best possible deal. A broker can help you find the best interest rates and lowest fees for your circumstances.
To find out more about remortgaging with Niche Mortgage Info, get in touch with our team today. We can help connect you with the right lender for your circumstances, no matter your situation.