A Quick Guide to Remortgaging

Craig looks at remortgaging – what it is, why you might do it and what happens if you don’t. 

Your mortgage deal is ending – what should you do? Remortgaging is switching your mortgage deal to another lender to get a better deal. 

Why remortgage?

A great example is when you have a fixed rate mortgage deal.  When your initial interest rate comes to an end, if you don’t act you’re switched to the lender’s standard variable rate (SVR). That’s usually higher than other deals in the marketplace – so switching mortgage deals often works out much cheaper, both monthly and in the long term. 

Remortgaging can also help pay off your mortgage early by negotiating a better deal. Plus, you can remortgage to release cash to fund home improvements or other spending. 

Remortgaging isn’t complicated. You may be able to find a deal with your existing lender, but check it against the rest of the market to make sure you get good rates and low fees. 

What to consider

Most mortgages have an early payment charge during the initial period, and if you switch during that time you incur a penalty charge. But once your deal is up, you’re free to move your mortgage charge-free.

Most mortgage offers are valid for three to six months, so if you plan ahead and get your new deal in place, once one rate finishes, your new one will start. But don’t leave it too late – if you’re moved to the SVR, you face higher mortgage payments.