Remortgage services

Key benefits of remortgaging

When remortgaging is done right, it can give you a whole host of long-term, financial advantages. This is why it’s so important to review your lender, deal and terms regularly.

Potential monthly savings

One of the most common reasons for remortgaging is to reduce monthly payments. It’s not uncommon for borrowers to unknowingly roll onto their lender’s Standard Variable Rate (SVR) once a fixed or tracker deal comes to an end. SVRs are often considerably higher than the best deals available on the market, resulting in higher than necessary payments. In fact, switching from a higher variable mortgage rate to a lower fixed mortgage rate could save thousands over the course of a mortgage term. On a large mortgage balance, even a very small reduction in interest rates can have a big impact.

Financial stability and certainty

When you remortgage, you have the chance to choose a mortgage that suits your appetite for risk. Fixed rate mortgages can provide peace of mind by keeping monthly payments predictable, whereas tracker rate mortgages or discounted deals might suit you better if you’re comfortable with some level of fluctuation. This stability is particularly valuable when managing household budgets or planning for future financial commitments.

Access to property equity

As you repay your mortgage and your property value increases, you build equity. Remortgaging can allow you to unlock some of that equity at mortgage interest rates – which are typically lower than other forms of borrowing – and use the money for other reasons. You might decide to use it for home renovations, extensions or home improvements. You might need to support a family member financially, or maybe you need a deposit for a buy-to-let investment or a second property. The choice is yours.

Better mortgage features

It’s a tale as old as time, but new products often come with new features, and that’s certainly the case with mortgages. When you remortgage, you have access to newer mortgage products, which often come with more flexible features, such as overpayment allowances, payment holidays, reduced early repayment charges and flexible repayment options. These might not be features you have access to on your current mortgage deal. Remortgaging gives you the opportunity to upgrade not just your rate, but the overall structure of your mortgage.

When to consider remortgaging

It’s one thing to know why you should remortgage, it’s another to know when you should remortgage. There are certain situations where it’s a good idea to review things, such as:

Your current deal is coming to an end

If your fixed rate mortgage or tracker rate mortgage is due to end within the next six months, it’s the ideal time to explore remortgaging options. Acting early allows you to secure a new rate in advance and avoid reverting to a higher SVR, which is a risk if you leave things too late.

Interest rates or market conditions have changed

There’s always something changing in the world of mortgages, and a lot of these changes can impact your rate. Changes often create opportunities for you to lock in more competitive rates or mortgage products that weren’t available when you last applied.

Your property has increased in value

A lot of homeowners find that their property increases in value over the years and, if that’s the case for you, remortaging allows you to capitalise on that. A higher property valuation can reduce your loan-to-value (LTV) ratio, and lower LTVs tend to attract better interest rates. This means you could potentially access deals that were previously out of reach.

Your finances or credit profile has improved

There’s no knowing what’s around the corner, and your circumstances could have changed since you applied for your current mortgage. You might have had a promotion or payrise, meaning your income is higher than it was. You might have paid off a chunk of debt or reduced your borrowing, improving your credit history. Anything that improves your financial standing or credit profile can widen the range of mortgage deals available to you.

You need to raise capital for buy-to-let or investment purposes

Many homeowners remortgage to raise funds for a deposit on a buy-to-let property. When done strategically and with professional advice, this can be an effective way to grow a property portfolio while maintaining manageable borrowing levels.