Remortgaging is the name given to the process of changing your mortgage. Most commonly, this takes place when you switch to a new deal with a different lender or renew your existing home loan under new terms. We have answered the most frequently asked questions at What is the purpose of remortgaging?
Finding the best loan, rate or repayment terms when switching is similar to any mortgage selection process. This involves reviewing the interest rates available, assessing how much you want to borrow and looking into how much you can afford to repay. You can even search for suitable options using a remortgage calculator.
When you take out a mortgage, you will be given a fixed term that includes an interest-only or capital repayment option. Once this term expires, you may find there are better options available to you, which are more suitable for your plans or financial circumstances.
Many people who remortgage often do so to increase or decrease the amount they repay on a monthly basis. Or they may want to take advantage of a good deal or interest rate on offer from another lender.
It’s important to remember you don’t have to wait until the term of your mortgage, or your contract with a particular bank or lender, has expired. You can constantly review the mortgage you have and assess whether it would be beneficial to switch. Bear in mind that if you do change mortgages by moving to another lender before the end of the term, there is likely to be a penalty fee.
Some aspects you should consider when remortgaging include:
There can be a fee not only for the early repayment of your current mortgage but in order to take out a new mortgage with a different lender. It’s wise to investigate and calculate the cost of charges you will incur from moving your mortgage before you switch.
Fixed or tracker mortgage
There is no correct choice when it comes to choosing a fixed or tracker mortgage. You need to decide which is best for your personal circumstances and research what kind of rate or repayment options are suitable. Using an online mortgage calculator can help you to assess the perfect property loan for you.
Long term plans
As with any mortgage, it’s important to review the long-term plans you may have. Do you want to stay in the same property? Are you planning to start a family? Or are you hoping to retire within a few years? Questions such as these will help you determine the mortgage that’s right for you.
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