9 Reasons to Remortgage
Thinking whether to remortgage or not? Find out our nine reasons why you should consider remortgaging your home. You can save a lot of money on remortgaging, so make sure you get the best deal.
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9 Reasons to Remortgage
The mortgage on your home is likely to be the biggest financial commitment you have, so making sure you are on the best possible deal by remortgaging can save you a lot of money. A remortgage is when you take out a new mortgage on a property where you already have an existing loan or own it outright.
There are two ways to remortgage – you can either switch to a new mortgage lender or move onto a different mortgage deal with your existing provider. Whichever route you take, there are many valid reasons to remortgage. Check out our top nine reasons to remortgage your home today.
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Reasons to Remortgage Your Home
1. You Want a Better Rate on Your Mortgage
The mortgage market is very competitive in terms of available interest rates, so by switching mortgage lenders or moving to a better deal, you could significantly reduce your monthly mortgage payments. Switching to a different lender may involve paying an exit fee or an early repayment charge to your current provider. However, any extra charges may be worth it compared to the amount of money you could save by remortgaging to a better rate.
2. Your Current Mortgage Is Coming to an End
If your existing mortgage is nearing an end, you will need to find another mortgage. The best mortgage deals usually only last for two to five years and come with various incentives such as a tracker, fixed-rate, or discount mortgage. When your time is up, most lenders will automatically put you on its Standard Variable Rate (SVR), a rate that usually has a higher amount of interest and costs more than the other options available. This is a great reason to remortgage at a cheaper rate.
3. You Want More Flexibility
It's common for people's circumstances to change. For example, you may get a better job earning more money and wish to make overpayments on your mortgage, or you may want to switch to an interest-only or offset mortgage to free up capital. This is a great reason to remortgage. It allows you increased flexibility to switch to a mortgage deal that better suits your current financial situation.
4. Your Home Value Has Increased
If the value of your property has increased over time, it may be worth remortgaging. If this is the case, you may find your home has a more favourable loan-to-value rate, which opens up many more options. Remortgaging to a new deal can ensure you get much lower rates and free up cash to put towards paying off your mortgage, other debts, or perhaps put towards home improvements.
5. You Want to Consolidate Your Debts
Consolidating debt has become a common reason to remortgage. If you have credit card debt or short-term loans across several different lenders, you can raise money by remortgaging to pay off these debts and be left with just one monthly payment. Remortgaging for debt consolidation will reduce how much interest you pay on your total debt, saving you thousands in the longer term. This can also help you to recuperate any damage to your credit score.
6. You’re Divorcing
If you’re divorcing or splitting from your partner, remortgaging could raise the money you need to buy out your ex-partner, depending on your ability to afford the mortgage on just your income. Remortgaging for divorce can also help you get a deal with a better rate and lower, more affordable monthly payments.
7. You Want to Borrow More Money
Remortgaging enables you to borrow more money against your home. If your home's value has increased since you took out your original mortgage, your equity will have increased too, which means you can increase your mortgage amount against this. You can use this extra money for home improvements, funding a new business venture, or putting it towards your children's university education.
8. You Want to Pay Off Your Mortgage Quicker
One of the top reasons to remortgage your home is to pay off your mortgage sooner, so you'll be mortgage-free. Not many mortgage providers will allow you to overpay on your mortgage, and those that do may charge you to do so. If paying off your mortgage quicker is your goal, then remortgaging to a new deal with low or no overpayment charges is a good solution.
9. You Want to Avoid the Rise in Interest Rates
Rising interest rates can increase the overall cost of your mortgage, especially if you are on a tracker mortgage. If you’re worried about rates rising in the future, remortgaging could help you find a lower fixed-rate mortgage.
There are many valid reasons to remortgage. If you’re considering remortgaging your home but need help finding the right option for you, contact John Charcol. Our team of experienced mortgage advisers can recommend a range of remortgage options to suit you. Request a call back or call us on 0330 433 2927 to get in touch.
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Remortgage Calculator
The costs of a remortgage will depend on the amount you need to borrow, the type of mortgage, the interest rate you agree to pay, how long the term of the loan is and the fees you are charged when setting it up.
Find out how much you could save to help you find the best remortgage rates for your property with our mortgage calculator below. We also have mortgage calculators for home extensions and mortgage overpayments.
Remortgages
Compare remortgage rates and deals with our mortgage comparison tool and discover how this type of mortgage works, the process and if it’s suitable for you.
Debt Consolidation Remortgage
On this page we go through debt consolidation remortgages, how they work, when you can do it, the pros and cons, which lenders are available and more.
Remortgaging Guide
Remortgaging means to switch to a new deal with a different lender but stay in the same property. Learn about remortgage costs, valuations and see our advice.
Best Fixed Rate Mortgage Deals
On this page you can compare fixed rate mortgage deals on the market, learn about the different fixed terms and find answers in our FAQs.
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Do you want new home insurance to go with that new mortgage? Our in-house team can arrange bespoke buildings and contents insurance to suit your new requirements, for free.
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It’s easy to overlook your property as part of your finances, but your home is probably the biggest asset you have. Release money from your home with John Charcol's partnership with Key Retirement. Find out more and start the process today.
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There are many valid reasons to remortgage. If you’re considering remortgaging your home but need help finding the right option for you, contact John Charcol. Our team of experienced mortgage advisers can recommend a range of remortgage options to suit you. Request a call back or call us on 0330 433 2927 to get in touch.
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