Reason #1 Save money
The most common reason why you might want to remortgage is to save money.
And with the energy bills and the cost of living due to rise, this can make a real difference to your monthly finances!
How much could you save? Well, the savings can be considerable – as Castlegate Financial Services client, Ms L discovered when we helped her secure a new lower rate at 0.79% – reducing monthly repayments by £240. That’s an extra £2888 each year!
Reason #2 Your current deal is about to end
Most mortgages only last a short time – often two to five years – which is the typical period offered on a fixed-rate, tracker, or discount mortgage.
When it comes to an end, your lender will put you on its standard variable rate (SVR), which is probably going to be higher than your old interest rate and higher than the best buys available.
If so, you want to be ready to remortgage to find a better, money-saving deal that suits you. Remortgages can take slightly longer after covid, so it’s important to allow enough time before your deal ends – that’s why we help our clients get started a few months earlier – usually 2-3 months before their deal is coming to an end.
Reason #3 You want a better rate.
If you are tied into an initial deal then you might have to pay an early repayment charge which can be huge, often 2-5% of your outstanding loan. Plus, there is usually a small exit fee when you repay any mortgage.
This doesn’t mean you shouldn’t consider it as the savings can be huge (especially if you have a large amount of mortgage debt). Around a third of all loans made in the UK actually turn out to be remortgages, taking advantage of ultra low-interest rates and for homeowners to protect themselves against rate rises.
We can help you work out whether this is the right move for you.
Reason #4 Your home’s value has gone up…a lot.
Have you checked the value of your property recently and discovered it’s increased considerably? If the value of your property has risen rapidly since you took out your mortgage, you may find you’re in a lower loan-to-value band, and therefore eligible for much lower rates.
It’s worth a look? Post-covid, property values have been on the rise and you might be surprised.
Reason #5 You’re worried about increasing interest rates.
First things first, don’t panic! We can help you check what is meant by rates going up and how this might affect your financial position.
If it’s the Bank of England base rate that is predicted to go up, then this may affect your mortgage payments directly, depending on the type of mortgage you have.
If it’s the rates that new customers are being offered, then this doesn’t automatically mean yours will be affected.
To be sure, speak to one of our mortgage experts and we can explain what this means for you.
Reason #6 You want to product transfer & your lender won’t let you.
Perhaps you’ve had a pay rise or maybe you’ve inherited some money? You now want to pay extra and make a product transfer but your current deal won’t let you.
Whatever your situation, a remortgage could allow you to reduce the loan size and potentially get a cheaper rate as a result. But be wary of any early repayment charges or exit fees you might face – these need to be considered against the potential savings with a new, lower mortgage.
Reason #7 You want a more flexible mortgage.
Sometimes life gets in the way, whether that be changing jobs, going back into education, or traveling – whatever it is, there are mortgages out there which will let you take payment holidays.
Or maybe you’re tempted by a selection of different mortgages that combine your savings or current accounts with your mortgage?
Whatever flexibility you want in a mortgage, chances are it’s out there and we can help you find it.
Reason #8 You want to consolidate debt.
Mortgages can have lower rates than personal loans meaning that some people may be tempted to add their existing debt to their mortgage to reduce monthly payments, with the intention of using the money saved to pay off other debts.
However, as your mortgage will normally be over a much longer term, you could end up spending a vast amount more than originally intended- so you need to be sure this option works for you.
By assessing your affordability and searching the entire market to find you the best deal for your circumstances, we can help you assess whether this is the right way forward.
Reason #9 You want to extend or renovate.
Dreaming about a new kitchen or maybe that extension you’ve been in dire need of?
Remortgaging to a new lender might enable you to raise funds for home improvements cheaply on low rates. But remember to take all the fees into account to see if it really is cheaper than other forms of borrowing!
The new lender will ask you what the extra money is for, and with that probably ask for evidence if you are borrowing a large amount, like builder quotes, or proof that you have paid off the debts.
As well as helping you figure out if this is the best financial option for you, we can also handle the entire application process on your behalf – so that you have one less stress to worry about!
Reason #10 You want to release equity.
For example, if you want to release £20,000 of equity from your house that’s worth £300,000, with an outstanding mortgage of £200,000 – then you would look to remortgage for £220,000, rather than £200,000.
You can either ask to do this with your current lender, or remortgage with a different lender. When staying with your existing lender it’s called a product transfer, and if you borrow more from your existing lender it’s called a further advance.
As well as reviewing the interest rate charged and monthly payment, you should review other costs before going ahead. These can include early repayment or exit fees for leaving your current agreement, along with solicitor and setup fees for the new deal. We can help you work out what these might be, before you decide this is the right option for you.
Still wondering whether now is the right time to remortgage?
As an independent mortgage broker, we can help. After working with you to understand your financial position and circumstances, we will assess your affordability and search the whole market to find the best-suited deal for you.
Once we have identified the best remortgage deal, we will apply to the lender on your behalf, handle the entire application process for you, allocate you a dedicated case handler who will manage your case from start to finish, and update you all the way. Our aim is to give you complete peace of mind that everything is in hand to make your remortgage as stress-free as possible.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Castlegate Financial Services Limited is authorised and regulated by the Financial Conduct Authority. Our firm reference number is 621597. You can check this on the Financial Services Register by visiting the FCA’s website www.fca.org.uk/register