By admin 2020-10-26 17:04:25

Is Remortgaging A Good Idea

Taking out a new remortgage contract may seem like a tedious process of unending admin. If your introductory period on your mortgage is drawing closer to the end and not doing something about it, you’ll be reverted onto your lender’s standard variable rate (SVR), which can be slightly expensive.

According to Moneyfacts, a financial information portal, the average SVR is 4.89%. But currently you can get a two-year fixed, tracker or discount mortgage with an initial rate as low as 1.26%. On an outstanding mortgage balance of £200,000 reverting to a rate of 4.89% will mean you will have to pay £1,156 a month.

Though, remortgaging to the cheapest two-year deal paying 1.26% could theoretically give you repayments of £778 a month – a substantial saving of more than £4,500 a year.

How to Compare Mortgage Deals?

  • Check your credit history - this will help to ensure that your credit history is on track and will support your remortgage negotiations
  • Compare features - consider the features that you’d like from your new mortgage and how these will match your remortgage.
  • Calculate the costs - you will need to calculate the expected costs using a refinancing calculator. This will help you identify the gains that you will make over the term of the mortgage.
  • Compare interest rates - the interest rate offered by different lenders should be high on your list of considerations when looking for the best remortgaging deal.
  • Look at the fees - compare the fees that apply to different lenders. Some common mortgage fees include application fees and survey or valuation fees.
  • Speak to your current lender - ask your lender if this is the best deal that you can get.

Asking for the Best Remortgage Deals

The best remortgaging deal is one that suits your mortgage needs while not raising your expenses. Ideally, a good remortgaging deal will lower your ongoing expenses and periodic repayments by offering a lower interest rate and more suitable features.

Before doing your research, you should ask yourself the following:
  • What type of mortgage do I want?
  • What are the savings?
  • What is the mortgage term?

Getting expert advice about remortgaging options can be beneficial to you, you have options of a thousand different deals to choose from. Getting in contact with a whole-of-market mortgage broker can help you find the best one for you.

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