Because, for many of us, our mortgages are our biggest expenditure, reducing it can lead to substantial savings. However, we don’t seem to spend our time using internet comparison sites or shopping around before we renew them. Instead, we choose to stay with our current lender, to reduce the stress. Even though if we were to negotiate skilfully, remortgaging would leave us better off each time. Halifax have a range of calculators that may help you in your search to reduce your monthly costs: https://www.halifax.co.uk/mortgages/mortgage-calculator/
This means you need to find another mortgage, regardless. The majority of the best mortgage deals only last between 2-5 years and come with incentives like fixed rate, tracker or discount mortgages. However, due to a fluctuating market, when your time is up, your lender will automatically put you on its Standard Variable Rate (SVR). This will likely be higher interest rate and more expensive than other options. That’s why it may be time to remortgage to a cheaper rate. Just make sure you are looking 3 months or so before your current mortgage deal ends.
Naturally, if you’re unhappy with the parameters of your current mortgage deal, you’ll want to change it. It could be down to a new job, a career break where you require ‘payment holidays’. Wanting to pay more than you currently because you’ve had an increase in income but it’s being prohibited by ‘mortgage overpayments, could be another issue. If this is the case, there are mortgages available which can accommodate for this or offer alternative packages which suit you more than your current lender.
You may’ve spoken to a friend or family member who are on a much better rate than you. This may prompt you to remortgagae and find a better deal. Just beware that if you breach the initial deal you’re in, you may be subject to an early repayment charge. Having said that, the savings from a new rate may outweigh the repayment charge, so it is worth considering.
The overall cost of your mortgage can increase because of interest rates rising. The decision to remortgage should be taken on the understanding that the Bank of England rates are increasing, therefore finding a lower fixed rate mortgage would be beneficial. If it’s just a case of higher interest rates for new customers, then this doesn’t mean your rate will automatically be affected; check with your lender beforehand.
Property prices are often fluctuating, meaning that since you took out your original mortgage, you may be in a lower loan-to-value (LTV) band. Remortgaging here can can make you eligible for much lower rates and free up some cash to spend on yourself. You can read more about LTV here: https://moneyfacts.co.uk/guides/mortgages/what-does-ltv-mean/
There are occasions in life when we need that extra cash injection. It may be an emergency or an investment but your lender isn’t always open to giving you extra money. In this scenario, remortgaging with another provider may enable you to raise the money needed or newer, cheaper rates than before. The new lender will quiz you about how you intend to spend their money and for things like a new car, they will be much more inclined to grant your request. Home improvements usually get the green light too, as long as you’re willing to provide evidence to support your case.
Use our remortgaging calculators to calculate new rates, repayments and other fees before deciding. Compare it against your current rates and if it works out that you’d be much better off financially each month and the total interest repaid is less, it could be time to capitalise on a new mortgage deal. Remember, it’s not always about saving money. Yes, you are likely to get better rates but securing the right deal for your home and its future is key. If you’re considering remortgaging, have a look at our remortgaging services and speak to one of our trusted advisors today!
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