A Guide to Remortgaging in 2023
Remortgaging is the process of switching your existing mortgage to a new deal, either with your current lender or a different one. It could be a way to potentially save money on your monthly payments, reduce the term of your loan, or release some equity from your home.
There are several reasons why you might want to remortgage, such as:
If you are on your lender’s standard variable rate (SVR), which is the rate you revert to after your initial deal ends, you might be paying more interest than you need to. By switching to a lower-rate deal, you could potentially save on your mortgage payments.
Avoiding interest rate rises
Interest rates are at their highest level since 2009. This means that if you are on a variable-rate deal, such as a tracker or a discount, your monthly payments could go up as well. By remortgaging to a fixed-rate deal, you can lock in a lower rate for a certain period and protect yourself from future rate hikes.
Changing your mortgage type
You might want to switch from an interest-only mortgage to a repayment mortgage, or from a tracker to a fixed rate depending on your circumstances.
If your home has increased in value since you took out your mortgage, you might have built up some equity in your property. This is the difference between the value of your home and the amount you owe on your mortgage.
You can access some of this equity by remortgaging to a larger loan amount than what you currently owe, and use the extra cash for whatever purpose you want, such as home improvements, debt consolidation, or a big purchase.
Want to release equity to make improvements to your home? Read our blog on remortgaging to release equity.
Get in touch with us
We’ll need some information from you, such as your current mortgage details, your income and outgoings, and your financial goals. We’ll then use this information to find you the most suitable deal from across our network of more than 65 lenders.
We'll do the hard work
We will handle the entire remortgaging process, from start to finish.
You can relax
The best part about using Newhomes is that it’s simple. We’ll take care of everything, so you can focus on other things.
When should you remortgage?
The best time to remortgage depends on your personal situation and goals, but here are some general guidelines:
Remortgage before your current deal ends
If possible, start looking for a new deal around six months before your current deal expires. This way, we can secure a new rate in advance and avoid any future rate rises.
Remortgage when your home has increased in value
If your home has gone up in value since you took out your mortgage, it might mean that you have moved into a lower loan-to-value (LTV) bracket. LTV is the percentage of your property value that is covered by your mortgage. The lower your LTV, the lower the interest rate and fees that lenders will offer you.
Here are some tips to help you get the best out of remortgaging:
Consider all costs involved
Our service is 100% fee-free, as we get paid by the lenders, but there are other fees that you might have to pay when switching deals or lenders. These include valuation fees, arrangement fees, legal fees, exit fees, and early repayment charges (ERCs).
Check your credit score and improve it if needed
Your credit score is one of the factors that lenders use to assess how likely you are to repay your loan and how much risk they are taking by lending to you.
The higher your credit score, the better your chances of getting approved for a remortgage and getting lower interest rates and fees. You can check your credit score for free with various online services such as Experian or Equifax and take steps to improve it if needed.
Contact us today for expert advice on Remortgaging
If you’re considering remortgaging, we can help you find a fantastic deal and walk you through the entire process. Contact us today for a free initial consultation.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.