Remortgaging to a different deal could potentially save you hundreds or even thousands of pounds a year, so it’s important to review your mortgage regularly to see if better deals are available elsewhere.
The main reasons people remortgage is to save money (by securing a lower rate of interest on the debt), or maybe because they are moving to a different property. Another reason to remortgage is to release capital (or ‘equity’) from you rproperty to pay for things such as home improvements, or to pay off other debts.
Many mortgages nowadays offer an introductory rate for a certain period.
This is often a fixed rate deal, which charges a fixed rate of interest for two or more years. Alternatively, there are discounted deals. These offer a discount on the lender’s standard variable rate (SVR), again for a set period.
There are also tracker deals, which track the Bank of England base rate, plus a set percentage on top.
Most initial deals will only last for a few years. When they expire you will usually automatically be moved onto the lender’s standard variable rate, which will typically, but not always, be higher than the rate they have previously been on.
You don’t have to settle for the standard variable rate or stick with the same lender for your whole mortgage term. Provided you aren’t locked into a deal which will charge you early repayment penalties if you change, you should be free to switch to another mortgage deal whenever you want which could save you money.
If you are currently paying your lender’s standard variable rate, you could potentially save yourself a large amount of money by moving to a different deal.
Always speak to an independent mortgage broker before remortgaging as they will be able to help you work out whether you are better off staying with your existing mortgage, or moving elsewhere.
Your first step should be to check there are no penalties to move from your existing deal. Once you have found the remortgage deal you want to move to, you will need to gather together all the information you needed when you first applied for a mortgage.
This will usually include proof of your current income, three years’ worth of accounts if you are self-employed, as well as bank statements and details of any other credit arrangements you have in place.
Your new lender will also want a valuation of your property before it will grant you a mortgage, which it will arrange, for a cost, on your behalf.
The Mortgage Helpers can help you compare lots of different remortgage deals before proceeding, to ensure the best mortgage for you.