Remortgaging my property – a quick guide
Remortgaging your property is a big decision, but make the right move and you’ll be glad you put the time and effort into it.
Why remortgage?
Well, if you’re coming to the end of your current mortgage deal, you’ll have to make a decision between finding a brand new mortgage and reverting to your lender’s SVR (Standard Variable Rate) deal.
If you choose to look elsewhere, you may be able to find a mortgage with a lower interest rate – particularly at a time like now when rates are historically low. If you can find a deal with a lower interest rate, you’ll be able to save yourself some money on your mortgage payments.
Having said that, you might find your lender’s SVR is a good rate. Just be aware that it isn’t a fixed rate, so it could go up when the Bank of England’s base rate does.
Your current deal doesn’t have to be coming to an end for you to look for another mortgage, though. You may be able to remortgage at any time, but remember that your mortgage provider may charge an ‘early redemption fee’ if you repay your current mortgage before your term is up.
Another reason remortgaging could be worthwhile is if you had any unsecured debts you wanted to consolidate.
If you’re carrying debts, it’s likely you’ll be making several monthly payments.
If you were to take out a debt consolidation remortgage, you could use this to repay all your unsecured debts and your mortgage – leaving you with just one payment to make each month to just one creditor (your new mortgage provider).
Of course, this means you’ll be borrowing more money against your home, potentially putting it at risk if you can’t keep up with payments. Plus, agreeing to repay debt over a longer time period can cost you more in the long run, due to interest.
Providing you can afford your repayments, though, it can help to make your finances much simpler and possibly save you money on a monthly basis.
If you’re thinking about remortgaging your property, make sure you know exactly why you want to do it, so you know what you’re really looking for when you’re speaking to your current lender/searching for a new product.
Remortgaging – what are my options?
As mentioned, at the end of a deal, you’ve got two options – stick with your current lender and see what they can offer you or find a different mortgage from a different lender.
There’s no ‘right’ or ‘wrong’ way of doing things; it’s all about what’s right for you.
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