Remortgaging before your deal is due to end could save you money. Read on to find out how.
With interest rates on the rise, you may be thinking that remortgaging early may be the right decision for you. Opting for a fixed rate now,could lead to you paying less in the long term, especially if interest rates increase in the future.
Remortgaging early may be the most suitable option, but it’s important to consider the whole picture before making a final decision. Let’s go over what remortgaging entails, the benefits of remortgaging, and any potential problems you may experience.
What does remortgaging entail?
When you remortgage, you are switching your mortgage from one deal to another, either with the same lender or a different one.
Remortgaging gives you the opportunity to shop around in the same manner that you would look for the cheapest phone bill or insurance deal. While there are perhaps more affordability checks in place, it allows you to determine whether your current mortgage is still right for you.
Just like when you first got your mortgage, lenders will want to make sure you can make your monthly payments. As a result, you’ll still need to provide proof of income and may be subjected to new credit checks.
What does early remortgaging mean?
Early remortgaging is a simple process which involves transferring from one mortgage product to another before your existing one expires. There are a few reasons why you would want to remortgage early, and each person will have their own set of circumstances to take into account.
What are the advantages of remortgaging my house?
People may look to remortgage for a variety of reasons. It’s not just about saving money, although that may be a big plus. Additional factors include:
- To free up equity in your property in order to fund renovations
- To free up equity in order to repay debts
- Your current mortgage rate is due to renew
- Making overpayments
Will there be an early repayment charge if I remortgage?
While remortgaging early can have advantages and potentially save you money, you may be required to pay an early repayment charge. You may also be required to pay an exit fee, so it’s important to take these costs into consideration.
Can I remortgage if I have a fixed rate?
There is nothing legally preventing you from remortgaging early, even if you are on a fixed rate. The same fees as described above may still apply, so you must consider these additional costs when deciding on your next steps.
What comes next?
Remortgaging does not have to be a challenging procedure. In reality, it may save you money, free up equity, and allow you to make overpayments. Speak to one of our experts if you’re considering remortgaging or want some advice on your alternatives.
Note: You may have to pay an early repayment charge for your existing lender if you remortgage early.