Top Reasons to Remortgage Your Home and the Process

Written on 17 February 2025 by Nicholas Mendes

A mortgage is a long-term commitment, which means you’ll want to ensure it continues to meet your needs as they evolve over time. Since your circumstances aren’t static, it makes sense that your mortgage requirements won’t be either.

The most opportune time to remortgage onto a new deal that better fits your needs is when your introductory rate is due to end. Remortgaging at this point helps you avoid transitioning to your lender’s more expensive Standard Variable Rate (SVR) and prevents incurring any Early Repayment Charges (ERCs).

In this blog, I’ll discuss the benefits of remortgaging in detail, outline the process involved, and explain how an independent mortgage broker like John Charcol can assist you.

Benefits of Remortgaging

First, let us start with the benefits of remortgaging.

Lower Interest Rates

One of the primary motivations for remortgaging is to secure a lower interest rate than what your current lender offers through a product transfer. While product transfers are increasingly popular, there are over 120 lenders in the market, so it's essential to ensure you're securing the best deal. A reduced rate can lower your monthly payments and result in significant savings over the life of your mortgage, especially if you regularly review your deal to avoid your lender’s SVR. Additionally, if your credit has significantly improved since you took out your original mortgage, remortgaging may help you access more competitive rates.

Access to Equity

As your property's value increases, remortgaging allows you to tap into your home’s equity for various purposes—such as home improvements, debt consolidation, or funding major life events. Your existing lender's affordability criteria may have changed, and while they might decline a further advance, remortgaging with a new lender could enable you to release equity.

Flexible Repayment Terms

Remortgaging enables you to adjust your mortgage terms to better suit your financial situation, whether that means extending the term for lower monthly payments or shortening it to pay off your mortgage faster. You can also choose a product with overpayment facilities if you anticipate making large repayments. Consulting a whole-of-market mortgage broker like John Charcol can help you explore these options.

Debt Consolidation

If you have high-interest debt, such as credit card balances or personal loans, consolidating them into your mortgage can make them more manageable and affordable, as you may benefit from a lower mortgage interest rate. However, be mindful that consolidating debt into your mortgage can lead to higher overall interest payments, depending on the debt and your mortgage term. As brokers, we will assess whether this is suitable for you and explore the best options available.

Additional Facilities and Setups

Life is unpredictable, and your financial situation can change. Remortgaging can help you adapt by providing access to flexible mortgage facilities, such as overpayment options, offset savings accounts, and Home Equity Line of Credit (HELOC) schemes.

Steps in the Remortgage Process

Navigating your remortgage options can be daunting, especially if you're unsure of the process. At John Charcol, we handle everything and guide you through each step:

Assess your current mortgage - review your existing mortgage deal, including the interest rate, remaining balance, term, and any early repayment charges
Set financial goals - determine what you want to achieve through remortgaging - whether it's lowering monthly payments, releasing equity, consolidating debt, or paying off your mortgage sooner
Shop around - research different lenders and mortgage deals to find the best offer. Comparing rates, terms, and fees is crucial. Speaking to a whole-of-market mortgage broker like John Charcol simplifies this process, as we have access to a wide range of mortgage deals and can provide expert, tailored advice
Apply for the new mortgage - once you've chosen a suitable deal, we handle the application process, submitting it on your behalf and liaising with the lender
Valuation and underwriting - the lender will conduct a property valuation (which may be a desktop assessment) and underwrite your application by verifying all provided information. If everything meets their criteria, they will issue a mortgage offer
Conveyancing - solicitors manage the legal aspects of the remortgage, facilitating the transfer from one lender to another
Completion - your new mortgage is finalised, and your old mortgage is paid off

Benefits of Speaking to a Broker

Mortgage brokers are invaluable in the remortgage process. Here are some example of the benefits of using a broker:

Expertise - brokers are knowledgeable about the mortgage market and can find you the most suitable deals. They also have a deep understanding of lenders criteria, so if your income or circumstances are more complex, you’ll find it especially helpful to consult a mortgage broker. If a lender has declined your application, don’t be disappointed as one lender’s opinion doesn’t reflect the market. A mortgage broker will be able to assess your situation and look into finding you a more suitable lender with criteria that aligns with your situation
Savings - brokers can often secure better rates and terms than you could on your own, resulting in potential savings. Some lenders only deal or offer bespoke products through an intermediary only. This is nothing untoward, but some lenders prefer a broker take on the advice process rather than dealing directly with a customer
Time savings - brokers streamline the process. It’s literally their job to sort your mortgage which means they can save you a great deal of time and effort in researching and comparing lenders, as well as getting your application together and liaising with the lender
Access to exclusive deals - brokers often have access to exclusive mortgage deals not available directly to consumers

Get in touch with us today on 0808 271 1791 to see how we can help you remortgage.

When to Start Looking for a New Deal

It's essential to monitor your current mortgage and keep an eye on the market. Regular mortgage reviews can help you identify opportunities to save money or improve your loan terms. Start considering a remortgage when:

Your current deal is ending - typicallystart the process around6 months prior to the end of your fixed rate or initial products period,as this gives you ample time to explore options and lock in a new deal without overlapping costly fees
Your financial situation changes - if your income increases or decreases, or if your expenses shift significantly, you may need to adjust the terms of your mortgageto maintain affordability or to take advantage of better rates
You want to release equity or consolidate debt - remortgaging can help you access the equity in your property, which can be used for home improvements, investments, or significant life expenses. It can also help consolidate higher-interest debts into a more manageable payment structure.

Avoiding the Lender's Standard Variable Rate (SVR)

When your initial mortgage deal ends, you may be transferred to your lender's SVR which tends to be higher. SVRs are often influenced by the lender's discretion and broader economic conditions, making them less predictable and typically more expensive. Remortgaging is an excellent way to avoid this and secure a better deal with more favourable and stable terms.

What to Consider When Remortgaging

Fees and costs - be aware of any fees associated with your new mortgage, including arrangement fees, broker fees, valuation fees, and legal costs. These can add up quickly, so factor them into your overall savings calculations to ensure remortgaging is cost-effective
Credit score - ensure your credit score is in good shape, as it can significantly impact the deals available to you.A higher credit score often qualifies you for lower interest rates and better terms, so it may be worth taking steps to improve your score before applying
Long-term goals - consider how your mortgage fits into your long-term financial goals, such as retirement planning,buying additional properties, or funding education. Aligning your mortgage strategy with your future plans can optimise your financial security
Equity release - if you plan to release equity, think about how you intend to use the funds wisely. Consider whether the benefits of accessing cash now outweigh the long-term cost of borrowing more against your property

Advice for Those Waiting to See What Happens in the Mortgage Market

The mortgage market can be unpredictable, but waiting for the right moment to secure a deal is not a viable strategy. Interest rates can fluctuate rapidly due to economic changes, central bank decisions, or global events. Lenders frequently adjust and reprice their products based on market conditions, and you don’t want to lose out on a deal as you feel something better will come along. Hesitation could result in higher rates or less favourable terms. A mortgage broker continually monitors the market, so rest assured your adviser will get you the best deal available to you at the time, and many brokers can secure rate switches if a better deal emerges before your mortgage completes.

Remember that remortgaging at the right time can save you money, enhance your financial stability, and allow you to access the equity in your home. Staying proactive and informed about your mortgage options is key to maintaining financial health.

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