All you hear in the news lately is the cost-of-living crisis and a recession that is going to come in the autumn. Are you someone who is really worried about how it is going to affect you and your family? Some people may have started shopping around to find a cheaper broadband or car insurance provider, but have you considered reducing your monthly mortgage payment?
What is re-mortgaging?
A re-mortgage is when you move your mortgage to a new deal with another lender or move to a different deal with your current lender.
Why is re-mortgaging a good option?
When you switch to a new interest rate with your current lender, this is known as a product transfer. Not much will change if you do this other than the amount you repay.
However, you can shop around and get a better deal with a new lender. They will effectively pay off your old mortgage and your debt transfers over to them. You will then be paying the better interest rate and will have the option of fixing your rate usually for 2 or 5 years. This will then give you the peace of mind of knowing what you will be paying for the next 2 or 5 years.
Other reasons to re-mortgage.
- You are coming to the end of a deal. Most mortgage advisers will usually advise you start looking for a new deal 3-6 months before your current rate ends.
- To beat interest rate hikes. As inflation goes up, interest rates are going to follow. If you can fix your rate while it is low, it might save you money in the future.
- You want to overpay. Some deals do not allow you to overpay on your monthly payments.
- The value of your home has gone up. If your property has significantly risen in value, your home may have moved to a lower loan to value band, meaning re-mortgaging may give you access to reduced rates.
- You want to do some home improvements. If you have enough equity in your home and can afford the repayments, it is possible to re-mortgage to foot the bill for home improvements and extensions.
What shall I do next?
Everyone’s situation and circumstances are different. If you think re-mortgaging would be the right option for you. Get in touch today and one of our expert advisers can have a conversation to discuss the best options for you.
*You may have to pay an early repayment charge to your existing lender if you remortgage. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
