When to remortgage
Keeping an eye on your mortgage for cheaper alternatives is wise, but the ideal time to consider remortgaging is three to six months before your current deal expires.
This timeframe allows you to secure a better deal and avoid defaulting to your lender’s standard variable rate, potentially saving on repayments.
Remortgage offers typically remain valid for three to six months from a new lender, ensuring their relevance unless your financial situation changes. You are not tied to the offer until you commit.
While early repayment charges can make premature remortgaging costly, certain situations might still make it beneficial. The savings from a new deal could outweigh these fees, sudden interest rate hikes might necessitate lower monthly payments, or you might need extra funds for home improvements.
Expert Commentary
Olivia Harland, Senior Mortgage Consultant:
"As fixed or introductory rates near their end, mortgage holders might consider a product transfer instead of a full remortgage. While the high rate volatility of 2023 may still be a concern, the market has significantly improved this year, with rates much lower than last year's peaks.
"To navigate these changes wisely, consulting with a broker is essential. Their guidance can help you choose the best remortgage deal or product transfer, ensuring you avoid any regrets with a fixed rate decision."
How to compare remortgage deals
There are a large number of factors to consider when assessing the right remortgage deal for your needs. Best Buy tables can be useful however a thorough comparison is crucial as a low remortgage rate with high fees might cost more than a higher rate with no fees.
Cleerly's experienced remortgage consultants are available to assist with detailed comparisons and will evaluate your unique circumstances, whether it is employment status, complex income streams, or evolving goals to match your lifestyle. It's also important to note that specialist brokers often have access to intermediary-only deals from lenders which are not available direct to customers.
To effectively evaluate your remortgage options, Cleerly review a comprehensive comparison list that includes key factors such as:
- Interest rate or borrowing cost
- Term duration
- Remortgage type (fixed, variable, tracker, or offset)
- Set-up fees (application, product, and valuation fees)
- Cashback, incentives, and bonuses
- APRC (overall cost for comparison over the mortgage's life)
- SVR (standard variable rate post-agreement)
- Flexibility for overpayments or payment holidays
- Early repayment charges
- Maximum loan-to-value (LTV) ratio, reflecting your equity
- Minimum and maximum loan amounts
Why use a remortgage broker?
Remortgage advisers provide a wealth of market expertise, carefully evaluating your financial status, employment and income arrangements, risk appetite, and needs to offer bespoke recommendations. Unlike lenders, Cleerly consultants will explore the entire mortgage market to find the best fit for you.
Brokers also reduce the risk of mortgage loan rejection by understanding the specific criteria and preferences of various lenders. They match your financial profile with lenders likely to approve your application, leveraging their extensive networks and insider access to exclusive deals and terms. This expertise can lead to significant savings over your mortgage's duration.
Importantly, mortgage advisers streamline the remortgage process by managing paperwork, addressing lender inquiries, and ensuring smooth progression. Their guidance not only saves you time but also enhances your chances of securing a favourable deal. While there may be costs involved, the benefits of their services often outweigh these, making them an essential part of your remortgaging strategy.
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Remortgage FAQs
- Remortgaging can help you secure a better interest rate than your current deal, potentially saving you money each month.
- By remortgaging, you may also reduce your mortgage term, which can save you thousands over the life of the loan.
- If you want to release equity in your property for home improvements or debt consolidation, remortgaging is an effective option.
Yes, you can remortgage during a fixed term, but you might face an early repayment charge (ERC). If the new deal offers significantly lower rates, it may justify the switch; however, weigh the costs carefully. Our mortgage consultants can guide you through the pros and cons of remortgaging in this scenario.
Absolutely, although it can be more challenging. A broker like Cleerly specialises in helping clients with complex incomes secure competitive remortgage deals.
Read our essential guide to remortgaging for the self-employed.
Here are some expert tips:
- Identify all income streams, such as salary, dividends, bonuses, and rental revenue, and ensure you have clear documentation.
- Partner with a specialist broker familiar with complex incomes, like Cleerly, to consolidate your application and connect with suitable lenders.
- Gather all relevant tax documents, such as tax returns and SA302 forms.
- Review and improve your credit score using platforms like Experian, Equifax, and TransUnion.
- Consider specialist lenders who handle complex mortgage scenarios, often offering better terms than mainstream banks. Cleerly can leverage its strong partnerships to help you.
Remortgaging can be inexpensive, with many lenders offering free valuations and legal packages. However, consider additional costs like arrangement fees and early repayment charges. Our mortgage consultants will carefully evaluate these to ensure remortgaging is the right choice for you.
Yes, but it depends on your current mortgage terms and could be costly due to early repayment charges. Even if locked into a deal, explore options three to six months before it expires to ensure you're ready to switch.
Usually, a new valuation is needed if you switch lenders. Staying with your current lender might not require one but verify with them first.
You'll need documents like:
- Last three months' bank statements
- Last three months' pay slips
- Two to three years' accounts or tax returns if self-employed
- Latest P60 tax form
- ID such as a passport or driving licence
- Proof of address via utility or council tax bills
To release equity, consider borrowing more than your current mortgage. This is feasible if your current deal is nearing its end, subject to affordability and property value. Alternatively, a second mortgage might be an option.
Age limits vary by lender. This is lender-specific with some setting a maximum age for starting or ending a mortgage deal.
Yes, some lenders allow for remortgaging on existing interest-only terms or offer new deals. If your property's value has increased, a lower loan-to-value ratio might secure you a better rate.