If you’re a relatively new homeowner then the term remortgaging might not be something you are completely familiar with.
Perhaps you’ve heard about it but you’re not quite sure what it means or when you’d need to remortgage?
Isn’t it just for those who are moving house?
And if not, is remortgaging a good idea for you?
What is remortgaging?
In simple terms, a remortgage means switching your mortgage from one deal to another. Either with your current lender or a new one, to get a better deal financially.
The new mortgage pays off the old one and you stay in the same house.
What are the benefits of remortgaging?
It could save you money
You’re probably already familiar with shopping around for deals to switch your broadband or energy supplier. If done correctly, remortgaging can help you save money in much the same way.
- Interest rates may have lowered since you took out your last mortgage deal. Remortgaging could help you to take advantage with a lower rate product.
- Your property value may have increased. And a lower LTV (loan to value) rate means better deals, remortgaging could help you switch.
- You’re coming to the end of your fixed term deal. Remortgaging at the end of your current fixed term deal instead of moving to the SVR (standard variable rate) could help to avoid your monthly repayments increasing.
It can help manage changes to your finances
Sometimes changes in your life can mean you need to borrow more money or that you can contribute more to your mortgage. Remortgaging can help to manage this:
- Release equity for home improvements. Perhaps you want to make changes at home, like an extension or conversion, or important structural improvements like a new roof or windows. Remortgaging can release equity from your property to help you afford these changes.
- Make overpayments that your current deal doesn’t allow. Perhaps you have additional income and you want to invest in your home. If your current mortgage doesn’t allow this then remortgaging could find you a product that will.
- Move from interest only to repayments. If your financial situation changes and you’ve been on an interest only mortgage but want to move to a repayment option, then remortgaging could help you switch.
As with all financial products, remortgages are dependent on your individual circumstances.
But whether you’re just a few years into owning your first home, or a decade into your home-ownership journey then it’s worth checking if remortgaging could help you. Call our freephone mortgage advice line on 0333 005 0333. In just a 15-minute discovery call we can evaluate your financial circumstances and offer you helpful financial advice.
Think carefully before securing other debts against you home. Your home may be repossessed if you do not keep up repayments on your mortgage.