Remortgage

Remortgaging – when and how to get a new mortgage deal 

There are lots of good reasons to get a new mortgage – to reduce your monthly payments, get a different type of mortgage or borrow more money. A Mortgage Broker like Total Home Loans can make it painless and worthwhile.

What is remortgaging?

Remortgaging just means getting a new mortgage, often with a new mortgage provider. If you stay with your existing lender but get a new mortgage deal, it can be called a Product Transfer. 

There are lots of reasons you might want to get a new mortgage.

Reasons to remortgage

The situations where you might remortgage include:

• Your current deal, especially a fixed rate period, is ending soon. 
• You want to borrow more – e.g. for home improvements or to pay debts.
• You want to change from an interest-only to a repayment mortgage, or vice versa.
• You’re worried about interest rates going up. A fixed rate mortgage will stop rate rises putting up your payments.
• Interest rates have dropped, so you’re remortgaging to get a better rate.
• Your home has gone up a lot in value. That gives you a better loan-to-value ratio, which might mean better rates.
• You want to overpay but this isn’t possible on your current deal. Overpaying can help you pay off your mortgage early. 
• You want a more flexible mortgage.

When is remortgaging not a good idea?

There are some circumstances when remortgaging might not be advisable: 

Your financial situation has changed

If your income has decreased you may not find a mortgage offer as good as your current deal. 

You don’t have much more to pay

If you just have a few thousand pounds left on your mortgage, changing deals won’t change your payments much.  You could remortgage to borrow more money, however. 

Your current deal has a high early repayment charge 

Lots of mortgages will charge an exit fee if you end it early, typically 5% of the mortgage balance. It’s usually worth waiting until the end of the term. 

Your equity is small

If property prices have dropped or you haven’t paid off much of your mortgage yet, you will have a high loan-to-value. It could mean you can’t attract very favourable rates, and are better off staying with your current mortgage. 

You’ve had credit problems

If your credit score has fallen since you took out the mortgage, it could be difficult to get a competitive deal. 

You’re already on a good rate

If your current mortgage is good value, whether it’s a variable or fixed rate deal, don’t remortgage.