Discover whether remortgaging could be right for you, plus a clever extra option.
You may find yourself wondering if remortgaging is right for you.
And no wonder!
One-third of all UK loans made are actually remortgages! Homeowners frequently switch to protect against rate rises and take advantage of better deals. (moneysavingexpert.com).
However, remortgaging isn’t always the best decision for every homeowner.
To remortgage or not to remortgage? That is the question.
Read on to discover whether remortgaging is right for you.
But first, what is remortgaging?
Remortgaging is the process of moving your current property from one lender to another.
Some people do this in favour of a cheaper deal or if their initial deal is about to end. If this happens, you can be at risk of falling onto your lender’s hefty Standard Variable Rate (SVR).
This is the default interest set by your lender, and can be far more expensive!
However, when you remortgage, you may need to pay an early repayment fee if you are exiting your agreement before the ‘official’ term ends.
So how do you know if it is worth it?
The BIG Pros to remortgaging
Avoiding the Standard Variable Rate can be one of the biggest pros of remortgaging.
It is also a good reason why paying the early leaving fee could save you money in the long term.
For example, if you fall from a fixed rate deal where you have been paying a steady cheaper amount to the SVR, this can be a big difference.
According to a recent report, the average SVR increased from 0.15% to 4.61% in March alone!
If you avoid this big increase by switching to a cheaper fixed-rate deal, you may avoid paying an unnecessary extra amount. (Moneyfacts UK Mortgage Trends Treasury).
You could even put money forward to overpay on your mortgage, becoming mortgage-free sooner!
But watch out
It is important to think carefully about which option would work best for you.
For example, rising interest rates hit a 30 year high in January which will affect new deals.
If you are on a long-term fixed mortgage, you may be better off staying where you are.
In this case, your rate may be lower than newer deals out there, which might have risen with the Bank of England’s base interest rate increase.
There are also lots of additional remortgaging costs to consider, in addition to the early leaving fee.
You are likely to need to have a property assessment, for example, which can cost you extra money.
A financial advisor should be your first port of call when trying to assess what the best option is for you!
Our Insider Secret…
Sometimes a phone call can make all the difference.
Rather than deciding to remortgage without exploring all the options, why don’t you give your lender a call?
If you say you are thinking of switching, they may offer a ‘product transfer’ to keep you.
This may put you on a new deal, saving you from that sticky SVR, while avoiding the scary leaving penalty!
So what are you waiting for?
On average, there are 39,000 homeowner remortgages every month in the UK (Finder UK).
Book a call with a member of our FOMO team for specialist advice on whether remortgaging is right for you.
All our advice is free for customers, so you won’t pay us a penny!
Fill out the FOMO remortgaging form below to get started.
Your home may be repossessed if you do not keep up repayments on your mortgage.
