When you review your current mortgage product (either because of changes to circumstances or the end of your current product period.  Then there are options to review as to what the next steps should be.  When it comes to the end of your current product, or you are on a variable rate and what a fixed product then you have a couple of options – you can either switch products with your existing lender (known by various names for example: product switch/rate switch/product transfer -sometimes with a further advance if required) or you can take out a new mortgage with a new provider (a remortgage).

  • Facebookhttps://www.facebook.com/downtonmortgagesandFS/
  • Google+
  • LinkedInhttps://www.linkedin.com/company/downtonmortgagesandfs/

There are many reasons why homeowners decide to look at a remortgage, often if you love the home you live in and aren’t ready to move house again. Remortgaging can sometimes offer up some financial flexibility for home improvements or just to bag yourself a new interest rate; it’s a smart move for people who are happy in their property but are looking to get a new mortgage product.

It’s always a good idea to know what your remortgage options are – even if you were a first time buyer who wanted the certainty of a fixed rate for a period of time – those years often fly by and expiring fixed term rates can come around pretty quickly.  At the end of a fixed rate, the mortgage will usually go onto the “Standard Variable Rate” of the lender resulting in an increase in monthly mortgage payments, so planning ahead is very sensible.  As often the current rates available with a lender are lower than the “Standard Variable Rate” that you will default to.

So, what exactly is a remortgage? Simply put, it is taking out a new mortgage on a property you already own outright or have an existing loan on; you can choose to product switch with your current lender or move to a new deal with another lender. There are some very good reasons for choosing a remortgage and here are a few to consider:


Remortgage for a better rate

If you’re looking for a better deal, you may choose to switch mortgage provider. There may be an exit charge, but you may still be quids in if you get a better rate than with your existing lender, so it could be well worth it, to save more money over time.


Your current mortgage deal is about to expire

If you know your fixed rate or tracker mortgage is about to end after your initial product term (for example after about 18-21 months if you are on a 2 year fixed rate), you need to start looking for another deal before it goes onto the lender’s standard variable rate (SVR), which would likely cost you a lot more.


Borrow your equity

If you have equity in your home and you want to release some to do home improvements, pay off debts or go on an adventure or two, by switching mortgages you may be able to release some equity at a cheaper rate than a loan or credit card (you must consider very carefully before securing unsecured debts to your home).


Remortgage to beat base rate rises

We find ourselves in uncertain times at present, and for those with a variable rate mortgage, any increase from the Bank of England base rate may mean that payments will climb significantly if they continue to rise. By switching and fixing to a new fixed rate, you can secure peace of mind for the next few years.


Change in personal circumstances

If you are divorcing or separating and need to split your home, there may be options available: Sell the house and divide the profit, or if one of you wants to stay in the house and buy the other out, a remortgage, if affordable, can help you do this. There are all sorts of variables with this but we are able to look at options so you can consider the best way forward.


If you want to review your options to see if a remortgage could be best for you today or if you simply want to know what your options are for your future, the Downton Mortgages and Financial Services team is more than happy to talk you through what would work best for you. All our proposals are tailor-made and are built around your circumstances and best interests. For a free discovery call, contact us today.