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The mortgage puzzel
Posted: 6th Nov 2018

Getting a mortgage doesn’t necessarily need to be about moving home. In fact, there’s a wide range of reasons why a borrower might want to swap their mortgage deal. It’s time to talk about remortgages.

What is a remortgage and why do it?
A remortgage is, essentially, the process of swapping your existing mortgage deal for another one – either with your current lender or with a new one entirely. But why would you want to do this? It may be that your own mortgage product has come to an end and you have transitioned to your lender’s revert-to or Standard Variable Rate (SVR). In this case many borrowers might decide to search the market for a better deal, which could reduce their monthly repayments.

Some borrowers in later life might choose to downsize to a smaller home once their children have flown the nest, or to be closer to family and friends. And of course, some choose to remortgage to raise capital, perhaps for much-needed home improvements or to gift money to children or grandchildren to help them onto the first rung of the property ladder.

Things to consider before you remortgage:

Early Repayment Charges (ERCs)
Some mortgages come with ERCs attached, meaning that redeeming the loan early or switching to a new deal may incur a charge. This is usually a percentage of the original loan amount or the amount being repaid. You should check with your current lender before making any decisions. For more information read our blog post on ERCs and overpayments.

Fixed or variable rate?
When comparing mortgages it’s important to consider the difference between fixed and variable rate deals. Both have their ups and downs – those who value the security of a fixed payment each month may prefer a fixed rate deal, which offers some protection against any Bank of England base rate increases.

Variable rate mortgages may be cheaper than their fixed rate counterparts, so long as you remember that your own monthly payment would change in line with any increase or decrease in the base rate or your lender’s SVR.

Fees and charges
You will need to take into account any fees associated with your new mortgage, including application, completion or valuation fees. If you are moving to a new home you may also need to consider Estate Agent and Solicitor fees, as well as Stamp Duty.

What to do next?
If you’re considering a remortgage, we may be able to help. We offer remortgages up to 95% Loan To Value, including for those coming off the Help to Buy scheme, with a range of repayment methods available. We also have no maximum age limit so we are able to lend to older and retired borrowers, provided that the mortgage is affordable.

For more information visit our product page or get in touch with one of our expert Mortgage Consultants for impartial, fee-free advice.

Your home may be repossessed if you do not keep up repayments on your mortgage.