Today’s competitive market sees a lot of borrowers choosing to switch their mortgage (remortgage) every few years in order to take advantage of the new rates that are on offer.
Those that do remain on the same deal for the whole term of their loan could potentially be missing out benefits, not least the opportunity to reduce the total amount paid back, this could be a significant margin in cases.
Remortgaging involves switching your current mortgage to a new deal, arranged either with an existing lender or a completely new lender.
Current home owners might want to take this step for some of the reasons listed below:
To save money
If you’re paying your lender’s Standard Variable Rate (SVR), it is possible your existing lender will offer you a better rate and greater flexibility on other available products, thus allowing you to save money on your monthly repayments or to repay your mortgage sooner.
Again, if your current lender doesn’t offer better rates or greater flexibility on its other products, you may want to consider switching your mortgage to another lender, even if doing so would trigger early repayment charges payable to your existing lender, as this could still mean a net saving to you.
A higher income or rise in your property’s value means you have the ability to increase your mortgage to help pay for major outgoings rather than borrowing money separately. A remortgage may help.
Avoid moving home
It can be cheaper and more convenient to adapt or add an extension to your existing home, paid for by remortgaging or a further advance, than to move home.
Remortgaging can allow you to release some of the equity you hold in your home and allows you to consolidate other debts that you may need to, such as a car loan or credit cards, those of which can attract higher rates of interest than that of your mortgage.