If you’ve reached the end of an introductory fixed, tracker or discount mortgage rate, or you’ve been on your lender’s Standard Variable Rate (SVR) for some time, you could be wasting a great deal of money without even realising.
Millions of people around the UK change lenders each year, but do you know how to navigate the process? Or what it means to have it done?
Don’t worry – this isn’t the kind of stuff they teach in school. So, here’s what you need to know
What’s a remortgage?
It's a new mortgage which replaces the current one you have, whether it’s with your current lender, or a new one. So the interest rate and your monthly payments will almost certainly change.
For example, if you want to pay less money off your mortgage each month, that can be arranged through a remortgage. Alternatively, if you need a lump sum for a new car or home improvements, a remortgage could provide it.
Your new mortgage rate will be calculated using a number of details, such as the amount of equity you have in your home, your income, and potentially your credit score.
You might have more equity in the property than you realise if its value has increased since you bought it, so you should get it valued soon.
Why you should consider a remortgage
Different lenders offer different deals, much like phone contracts or internet providers, so you need to treat your home repayments the same as every other major expense you have - something which needs to be assessed and reviewed regularly.
Getting a remortgage on a better deal could make a huge improvement to your disposable income.
Raising money from a remortgage
Did you know that you may be able to borrow thousands of pounds from a lender in order to fund large purchases, such as a new car for the family or home improvements?
It isn’t as simple as Monopoly, where you get the money back off the bank for the total amount that Mayfair is worth, but the principle is similar.
For example, if you wanted £5,000 for a new car or needed an extra £10,000 to pay for legal costs, you could remortgage your home to free up the funds and increase the monthly amount that you pay.
Whilst this may seem like a great idea, it is important to review all of your options to find the most suitable way of financing your purchase.
Speak to an expert
If you'd like to consider a remortgage, try our broker matching service and we’ll put you in touch with a mortgage broker who can find you a great deal and handle all the paperwork. So you won’t have to lift a finger.