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When is it a good idea to remortgage?

Image of Leanne Macardle

Leanne Macardle

Freelance Contributor
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At a glance

  • Remortgaging is when you take out a new mortgage to replace an existing arrangement for example at the end of an initial fixed or discounted rate period.
  • In times of economic uncertainty, moving to a fixed rate for a set period is a good way of ensuring your monthly payments stay the same for a specified period.
  • It is important to look at the financial benefits and drawbacks of moving to a new deal – especially if there is a penalty for leaving your current deal early.

What is remortgaging?

Remortgaging is taking out a new mortgage on your home to replace an existing mortgage. Remortgaging can be beneficial if you are currently on a lender’s standard variable rate (SVR), or a fixed or discounted variable rate deal that is about to end. This gives you the opportunity to take advantage of a new mortgage with better features, the security of fixed repayments or to take advantage of lower interest rates than you may currently be on.

Moneyfacts tip

Moneyfacts tip Image of Leanne Macardle

A mortgage broker can help you to calculate any potential savings by remortgaging. They can also help you understand the impact of any fees on these savings too. Find out if you should use a mortgage broker.

When remortgaging might be a good idea

The reasons behind high levels of remortgaging are that borrowers who took out a fixed rate mortgage two years ago have enjoyed historically low rates, however rate are now much higher as the Bank of England base rate increases.  With the potential economic uncertainty foremost in people’s minds, it is anticipated that the popularity of fixed rate remortgage products looks set to continue for the foreseeable future.

Should I speak to a mortgage broker?

Mortgage brokers remove a lot of the paperwork and hassle of getting a mortgage, as well as helping you access exclusive products and rates that aren’t available to the public. Mortgage brokers are regulated by the Financial Conduct Authority (FCA) and are required to pass specific qualifications before they can give you advice.

 

Speak to a mortgage broker today

 

MAB is the preferred mortgage broker of moneyfacts.co.uk

 

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Your home may be repossessed if you do not keep up repayments on your mortgage.

Moving onto a new deal early?

With borrowers potentially saving significant sums each year by opting for a new fixed rate mortgage, the move away from sitting on existing SVR deals is gathering pace.

 

Pros and cons of remortgaging

  • Remortgaging often avoids paying higher rates on a lender’s SVR.
  • Added security of fixing your repayment for a set period.

 

  • Lender may want you to remortgage your whole mortgage and move to a higher rate if your current mortgage is on a lifetime tracker rate.
  • Remortgaging would incur additional fees, such as booking, legal, conveyancing and valuation fees, if changing provider.

Moneyfacts tip

Moneyfacts tip Image of Leanne Macardle

Find out how much you could potentially save on a remortgage.  

 

Mortgage calculator

Our mortgage calculator helps you to see how much your mortgage might cost you each month.

Our how much can I borrow calculator gives you a range of how much a lender might consider lending you under a mortgage. This calculation is only an indication only.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

small wooden house in a family living room

At a glance

  • Remortgaging is when you take out a new mortgage to replace an existing arrangement for example at the end of an initial fixed or discounted rate period.
  • In times of economic uncertainty, moving to a fixed rate for a set period is a good way of ensuring your monthly payments stay the same for a specified period.
  • It is important to look at the financial benefits and drawbacks of moving to a new deal – especially if there is a penalty for leaving your current deal early.

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Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.

Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.