When it comes to the benefits of remortgaging the most appealing one for the majority of people in the current climate is the potential to save money. So, could you save cash by remortgaging? We’ve put this article together to explain what you need to know.
What does remortgaging mean?
In a nutshell, remortgaging is when you switch the mortgage on your current home from one lender to another. And your new mortgage will replace your old one. It’s a bit like when you’re looking for a new mobile phone and you’re comparing different deals: when you remortgage you shop around to make sure you’re on the right deal for you.
And if you remortgage onto a deal that’s much better than your previous one it has the potential to save you a significant amount of money.
Benefits of remortgaging: Why do it now?
The Bank of England has increased the base rate four times since December, taking it from 0.1% to 1%.
And if you’re on a tracker mortgage, when the base rate increases so will your monthly payments. While if you’re on your lender’s standard variable rate the amount you’ll pay each month might change too. Although it’s a bit more complex because the rate you’re on can change at the lender’s discretion. This means they could pass on all of the increase, some of it, none of it or they could hike it by more if they wish.
So if you’re on a tracker mortgage or your lender’s standard variable rate you may consider remortgaging onto a fixed deal to lock in a rate.
If you’re already on a fixed rate mortgage the amount you’ll pay on your mortgage each month will remain the same until your deal ends. However if your deal ends in the next few months ,you may consider shopping around now for a new deal to move onto once it ends.
Remortgage deals: How much could you save?
The amount you could save by remortgaging will depend on a number of factors. You’ll need to take into account the rate you’re currently on as well as the rate you’re able to secure. And you’ll also need to bear in mind any fees you may need to pay if you remortgage such as an early repayment charge if applicable.
But don’t worry about trying to work out all the calculations yourself because our team of experts is here ready to help and they’ll do the sums for you. They’ll explain the remortgage deals available to you and talk through any fees and savings.
What are the other benefits of remortgaging?
But while saving money is the main focus for many homeowners there are lots of other potential benefits of remortgaging.
So what are the other reasons why people remortgage? These include:
- Releasing equity to fund home improvements
- Releasing equity to pay off debts
- Wanting to make more overpayments on your mortgage than the deal you’re on allows
- Your current mortgage deal is up for renewal soon
How much could I borrow?
If you’d like to get an idea about how much you would be able to borrow check out our remortgage calculator. And to find out about what remortgage deals are available or if you have any questions about remortgaging then speak to our team of expert advisers. So call us today on 07375 886347 or click here to arrange a call back.
You may have to pay an early repayment charge to your existing lender if you remortgage.