For many people a mortgage is the largest financial commitment they’ll make, due to the length of time people tend to be tied into it.
However, what many people don’t realise is that just because you have a longer mortgage term, doesn’t mean you have to stay at the same rate throughout.
We advise on the most common remortgage misconceptions that people have, which may be costing you extra time and money:
1. It’s rare that people save money
A lot of people end up on their lender’s Standard Variable Rate (SVR) following the end of their fixed term deal, which is often a much higher interest rate than their initial term rate. By switching to a new deal with a lower rate, it is possible to save money, as many people do by remortgaging
2. Remortgaging is not only for those at the end of their fixed rate
It’s not only those at the end of their fixed rate mortgage deal that could shop around. There are also many other reasons why you may want to remortgage, such as releasing equity which can be used for home improvements, or to allow yourself to make overpayments.
You can also look at switching rates even if you still have time left on your fixed rate deal, however be wary of early repayment charges.
3. My deal has me tied in
As mentioned above, lenders often charge early repayment fees for leaving your mortgage deal early. However, these may be worth paying in order to secure a better rate in the long term.
Lenders may also be willing to waive this fee if you are staying with them and just changing mortgage deal, so don’t automatically assume you will be charged this fee.
4. My credit score no longer matters
Lenders will still need to check your credit file before offering you a mortgage deal, even though you already have a mortgage. Make sure to have your finances in order and check your credit score before you begin to shop around for a new mortgage deal.
5. My rate can’t be beaten
You won’t know until you shop around if you can find a better deal! It’s worth speaking to a mortgage broker who can search 1000s of mortgages to find the right deal for you.
Have a question about remortgaging? Speak to a specialist adviser today on 0800 652 6649, or email [email protected]
You may have to pay an early repayment charge to your existing lender if you remortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.