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6 Reasons To Remortgage Your Property

REMORTGAGING | 22.05.2017

Whether you want to save money or free up cash to spend on a big life milestone, remortgaging your property can be a great way of transforming your finances. Here are 6 reasons to remortgage your property

1. Your current deal is about to end

If you’re nearing the end of a fixed mortgage deal, your lender may automatically place you on a standard variable rate mortgage. This may see you paying a much higher interest rate than you do on your current deal. It may also see interest levels fluctuating and the affordability of your mortgage change. Remortgaging could see you accessing a much better rate

2. You want a better rate

Remortgaging your property could give you access to a much better interest rate than you’re currently paying. This has the potential to save you thousands of pounds over the course of the deal. If you’re already tied into a deal, you may face an early repayment charge. The exact amount you’re required to pay will depend on the lender, but this can sometimes be as much as 2-5% of your outstanding loan. You may also be expected to pay an exit fee for repaying your mortgage. Despite these charges, it’s sometimes still worth remortgaging because the amount you’ll save in the long term could exceed the cost of the fees.

3. Your home’s value has increased significantly

If your property’s value has increased since you first secured your mortgage, you may be eligible for a lower interest rate than you’re currently getting. This is because the loan-to-value ratio has changed since you took out the initial loan.

4. You want to protect yourself from interest rate rises

If the Bank of England base rate rises, your mortgage payments may be affected. By remortgaging, you could access a more affordable rate and lock yourself into a new deal. This can give you a sense of security while allowing you to budget without the risk of unaffordable repayment increases.

5. Your current lender won’t let you overpay

Whether you’ve had a pay rise or you’ve inherited some money, there may come a time when you want to pay off a chunk of your mortgage at once. Alternatively, you may wish to increase your monthly repayments so you can pay off your mortgage faster. Most lenders will let you overpay by 10% each year, but some have strict guidelines that force you to stick to your agreed repayment amount. If your current deal isn’t very flexible, remortgaging your property could enable you to reduce the size of your loan and potentially access a cheaper rate. Keep an eye out for exit fees and early repayment charges as mentioned earlier in this post.

6. You want to free up equity

If you bought your home with a large deposit or you’ve spent time building up equity within the property, you may choose to remortgage to free up cash. You could use this money to fund home improvements, pay for your children’s university fees, or resolve other debts. However, it’s important to assess your options before making such a move. In some cases, borrowing against your home can work out more expensive than a traditional loan.   If you’d like support and guidance when deciding whether to remortgage, please get in touch with our team of experienced mortgage advisors. We can assess whether remortgaging is right for you before finding you an excellent deal.
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