Should I remortgage?

Remortgaging is when you move your current mortgage deal to a new product or lender and there are definite benefits to doing so. But in the current mortgage market, it can be hard to know what the best option is when it comes to remortgaging. You might be wondering if you should remortgage or whether you should stay on current deal for now. Well don’t worry, we’ve put together this article to help you decide if you remortgaging is right for you.

So, why should I remortgage?

There are different reasons why you might remortgage. Here are a few:

1. Your current mortgage deal is ending – when you take out a mortgage, you may be on a fixed deal, which has an expiry date. Once this period ends, you’ll be put on standard variable rate, which tend to be higher than your previous interest rate. If you don’t look around for a new mortgage deal, and are put on an SVR, you might end up paying more on your monthly mortgage repayments.
2. You want to find a better mortgage rate – given the current rise in interest rates, finding a mortgage rate that is lower than what you’re currently on may not be that feasible. Should you choose to remortgage, it might be worth discussing with your mortgage adviser the term of your mortgage. Your mortgage adviser will be able to provide you with a range of products from 2 years to 10 years.
3. Your house is now worth more – if your house is now worth more than you originally paid for it, it could change your loan to value (LTV) ratio and mean you could get a lower rate. Given the current decrease in house prices, this might not necessarily be the case in the current market, but it’s definitely worth figuring out! If it is the case, speaking to a mortgage adviser can help you with the next steps.
4. You’re nervous about interest rates rising (again!) – if you’re worried about rates increasing in line with the Bank of England base rate, it was good news on 21^st September, where the Bank of England announced in freeze in the base rate, which now sits at 5.25%. Whilst we can’t predict what this means for the future, and if we’ll see any more increases, some lenders are starting to lower their interest rates in spite of this.[1]

Regardless of your reason for remortgaging, getting mortgage advice can be helpful as a mortgage adviser can explain the ins and outs to you. Our expert advisers can help walk you through the process and help you decide if remortgaging now is the right thing for you.

[1] https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2023/september-2023

Why shouldn’t I remortgage?

However, everyone’s circumstances are different, so it’s also a good idea to be aware of why remortgaging now might not be a good idea. These include:

1. Early repayment charges – if you come out of your current mortgage deal early, there may be an early repayment charge payable. If the repayment charge is large, then it might mean that you won’t save any money in the long run, so it’s worth taking this into consideration before making any final decisions. Your mortgage adviser will be able to help with this.
2. Current mortgage rates – unless you need to remortgage because your current mortgage deal is coming to end, the chances of finding a lower rate than what was previously available a few years ago is unlikely. Of course, it’s always good to discuss your options with a qualified professional, but if you’re currently on a good mortgage rate, it might be worth sitting tight for now with the deal you have.

Speak to an adviser

Like we’ve said – everyone is different! And this means that your reasons for remortgaging could be vastly different from Bob down the road. That’s why getting mortgage advice can help you make the decision of whether or not you should remortgage.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Depending on the broker, fees may be charged for mortgage advice.

[1] https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2023/september-2023