Choosing When to Remortgage
Interest rates aren’t the only consideration, and if you’re unsure when to remortgage, it's important to think about your goals and why you'd like to remortgage.
Should I remortgage because of lower interest rates? Not necessarily; interest rates will always fluctuate. Even if a remortgage looks cheaper on paper, the product fees, legal charges, valuation costs, and application fees might mean it is more expensive.
The best time to decide when to remortgage is if your circumstances mean a remortgage is in your financial interests.
For example, the below scenarios may mean that now is a good point to look at can I remortgage:
- Your current fixed-rate contract is due to end.
- You want to fix a stable interest rate during volatility.
- You can get a better interest rate now than when you originally took out a mortgage.
- You have sufficient equity in your home to reduce your proportionate borrowing (LTV).
- You want more flexibility in your mortgage repayments.
Should I remortgage now if I have a good level of equity? We can provide guidance on a case-by-case basis, but if you borrowed an original LTV of 85% and now owe 50% of the balance, you could save yourself a significant amount by remortgaging.
Next, we'll look at these potential situations in more detail to explain how easy is it to remortgage and the pros and cons.
Can You Remortgage at Any Time in a Fixed Deal?
The usual rule of thumb is to avoid remortgaging in a fixed deal because your lender may levy exit charges which can be expensive. Can I remortgage anyway? Yes – you need to understand the fees, though, and build these into your calculations.
Should I remortgage before the end of a fixed period? We normally structure remortgages to coincide with the end of the fixed deal, so you don't switch to the higher SVR interest and don't end up incurring an early settlement charge.
How do you remortgage to get the right balance? You can apply for a remortgage as much as six months in advance, so you are poised to switch at the exact right time.
Should I Remortgage if Interest Rates Are Climbing?
Interest rates have soared over the last few months, and if you are looking at taking out a new mortgage, it will likely cost more. However, should I remortgage is a different question.
In some cases, knowing when to remortgage is more about your circumstances. Still, remortgaging may be favourable if you are worried about further interest rate increases and the impact on your mortgage repayments.
How Soon Can I Remortgage to Release Equity?
How do you remortgage to release equity? If your property has risen in value, or you have paid off a large proportion of your mortgage, remortgaging for a slightly higher value than your current balance could be a viable option.
What does it mean to remortgage to release capital? You add the extra borrowing to the new mortgage balance and can use that cash to pay for other costs.
However, we’re also asked should I remortgage if I have a good amount of equity, and the answer is commonly yes. If you apply for a remortgage at a lower Loan-to-Value (LTV), you may qualify for much lower interest rates or more competitive products.
How Do You Remortgage to Consolidate Debts?
As with our above scenario, if you have built up equity in your property, you can remortgage to consolidate other debts. Should I remortgage now? As interest rates affect mortgage costs, they also make short-term borrowing more expensive.
Knowing when to remortgage can be complex, but you can consolidate other debts into your mortgage and repay one amount monthly at a lower interest rate over a longer term.
Can I Remortgage to Gain Flexibility?
Many borrowers want to make extra repayments, change their monthly payment value, or overpay if they have received a bonus or other income. Can I remortgage to a provider that allows additional payments? Yes, flexibility can be worthwhile if your mortgage does not allow for variances or overpayments.
How to Decide When to Remortgage
If you want to know can I remortgage or when to remortgage to gain the optimal cost savings, please get in touch with Revolution Finance Brokers.
As an independent broker, our expert advisors can evaluate your circumstances, make independent suggestions and help you decide when to remortgage to get the best deal to suit your borrowing needs.
