From shopping the whole market to timing your switch and weighing the true cost, here are the five things worth thinking about before you remortgage.
There are many reasons people decide to remortgage. You might be moving to a lower-rate product, releasing equity to invest, funding a one-off purchase, or paying for home improvements, and there are plenty of other motivations besides. Whatever your reason, it is worth pausing to think things through before you commit.
Most of the factors come down to money, the interest rate and the fees involved, including lender fees and any legal costs. On top of that, an adviser will weigh up longer-term factors such as affordability and whether the recommended lender genuinely suits you. That can mean looking at the maximum age allowed at the end of the term, the lender's standard variable rate, and how they treat existing customers who plan to stay with them for the long run.
We have pulled together five key considerations to make before you remortgage your property. If you still have questions afterwards about how best to remortgage, our team will be happy to help.
Before deciding to remortgage with your existing lender, it is worth exploring the market thoroughly. It can feel convenient to accept a new offer from your current lender, but the mortgage market is competitive and a broader range of lenders may offer a deal that suits you better. We look at the trade-offs in more detail in our guide to whether you should remortgage with the same lender.
Seek advice on the mortgage option that best fits your situation. Doing your own research is always possible, but talking to a mortgage broker can save you both time and money by narrowing the market down to the products that genuinely work for your circumstances.
Be mindful of the fees that come with remortgaging. Beyond the headline interest rate, look at the overall cost of the mortgage, which can include early repayment charges, exit fees, legal fees and valuation fees. A reliable broker will explain these costs clearly so you can judge whether switching genuinely leaves you better off.
The cheapest headline rate is not always the cheapest deal once fees are included. Always compare the total cost over the deal period before you switch. Our remortgage guide walks through how to do this.
Try not to leave it too late. Aim to secure a new deal before your existing one ends, especially if you are on a fixed-term arrangement. If you do nothing, your current lender may move you onto their standard variable rate, which can cost you more. Ideally, start exploring your options three to six months before your current deal expires. If you originally arranged your mortgage through a broker, they should remind you well in advance.
Finally, factor in any changes to your financial or lifestyle circumstances. Consider whether your income, the size of your family, or your other loan repayments have changed since you last took out a mortgage. This matters because it helps make sure you can comfortably meet your monthly payments going forward.
Speak to an adviser who will compare the whole market and weigh up the rate, the fees and your circumstances, so you switch only if it genuinely works for you.