With the current cost of living, sky high inflation and rising interest rates, you may be wondering if now is this right to remortgage your home and could it save you money?
If you remortgage onto a better rate, you may be able to save money on your mortgage repayments, and if you choose a fixed rate deal, you could be protected against any future interest rate rises.
Before you remortgage, there’s some things you need to consider to ensure you get the right mortgage deal for your circumstances.
What is remortgaging?
When you shop around to find a better deal on a mortgage that you’re currently on, and switch to it, this is known as remortgaging.
As your mortgage is likely to be the biggest monthly expense you’ll have, you’ll want to make sure that you’re always on the right deal. If there’s savings to be had on the amount you pay each month, it could have a big impact on your overall household finances.
Will interest rate rises affect my mortgage?
As interest rates continue to climb, it's so important to know how your mortgage payments could be affected. Being aware of your current mortgage deal and when it is due to end will help put you in a much better position to get the right deal for your circumstances when it's time to remortgage.
If you are on a tracker mortgage and the base rate rises, you will pay more on your mortgage each month. If you’re currently on your lender’s standard variable rate (SVR), the rate you’re on can change at the lender’s discretion. This means that they could pass on the full increase and your repayments may increase too. However, if you remortgage onto a fixed rate deal, the amount that you’ll pay each month will stay the same for the duration of your deal.
You can review your mortgage up to six months before your current mortgage deal is due to end. This gives you chance to switch onto a fixed deal and to lock in your new mortgage rate, beating any future interest rate increases we're expecting to see.
What should I do if I’m already on a fixed rate now?
If you are on a fixed rate mortgage deal and it’s due to end in the next 6 months, it’s always a good idea to start looking for a new deal now.
This gives you the time to lock in a rate now and avoid any future interest rate rises, and stay away from moving onto your lender’s standard variable rate when your mortgage deal ends.
Will it cost me to remortgage?
When you’re looking into how much you could save by remortgaging, you will also need to factor in any possible fees you’ll need to pay. For example, you may need to pay an arrangement fee for your new mortgage, and there may also be fees to leave your current mortgage such as an early repayment charge.
Our expert advisers can help you weigh up your options and whether you should remortgage now. Simply get in touch with us to book an appointment!
You may have to pay an early repayment charge to your existing lender if you remortgage.
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.