Ask the expert: Everything you need to know about remortgages

Published on
11 February 2022
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As a homeowner with a mortgage, you may have heard about remortgaging - either to get a better deal or because you’re coming to the end of your current mortgage.

Remortgaging doesn’t mean you’re moving home, but getting a new deal can help to save money overall and potentially pay off your mortgage earlier.

In this guide, we ask our mortgage expert at The Cumberland to explain what remortgaging is all about and when it’s a good time to consider it.

So what exactly is remortgaging?

Remortgaging is when you change the mortgage deal on your property, either by switching it to a new lender, or moving to a different rate with your existing one.

Why would I consider a remortgage?

There are a number of reasons why remortgaging might be right for you, and the benefits of a new deal can be different for everyone depending on your circumstances.

1. Your deal is about to expire

When your current mortgage deal ends, you’ll be put on your lender’s standard variable rate (SVR), which tends to be higher. Remortgaging can move you on to a lower interest rate.

Jack Green, Mortgage Hub Manager at The Cumberland, says: “For the majority of people it isn't beneficial to [go onto SVR] because, for example, they might want payment certainty which a variable rate wouldn't provide. For people that are on a SVR we can be saving them money, if that's not appropriate for them."

2. You’re on a high interest rate

If you’re on a variable rate mortgage, a rise in the Bank of England base rate can increase your mortgage payments. If you remortgage you could find a more competitive deal.

3. Equity release

You can release equity from your property when you remortgage to pay for home improvements or paying off other debts.

Jack says: “We see a lot of applications from people who are mortgage-free but are looking to raise funds against their property. For example, to pay for home improvements or to give to family members. With house prices increasing, you might get parents that want to gift money to their family members that way. We will do what is called a capital raising remortgage whereby we will raise on a mortgage-free property."

4. Mortgage overpayments

You may want to remortgage to find a provider with more flexible terms that lets you overpay on your mortgage without penalty.

5. Increased property value

If your property value has increased, your lower loan-to-value might help you qualify for better interest rates.

6. Offsetting savings

If you have built up savings, or perhaps had an inheritance or other windfall, you can use this money to offset against your mortgage debt with an offset deal.

7. Life changes

Whether you’re starting a family or expecting a significant change to your income, remortgaging gives you a chance to find a deal that’s a better fit for you now and in the future.

My existing mortgage product is about to end - what do I do?

The first step is to reach out to a mortgage advisor to discuss next steps. Click here to book an appointment with a mortgage advisor.

Jack says: “Speak to us and see what we have to offer. It's an advised mortgage that we provide so it means that we're looking at what's most appropriate for you, so not always the cheapest rate on our offerings. You can get information online but it's misleading and can be limited.”

Is it a complicated process?

Not at all - especially when you have the support of The Cumberland mortgage advisors.

“We can progress a remortgage application very promptly. What you tend to find is people have had a mortgage previously or they've got one now so they have an idea as to the sorts of things that you will be asking because they've gone through a similar process,” says Jack.

“We don't ask for the ends of the earth in paperwork and we encourage documents to be sent electronically wherever possible to keep things moving along.

“We offer weekend and evening appointments, trying to fit in with people's lifestyles.”

Is it ever too late to remortgage?

Not necessarily. Jack cites the example of a customer who was coming to the end of her deal in January and had left it late to discuss it with The Cumberland.

"What she ended up doing was going on to the SVR with her lender for a little while until the new mortgage with us completed, because realistically the solicitors wouldn't be able to turn around the legal work within three weeks,” says Jack.

“We want to be speaking to people within good time. Any mortgage offers that we produce are valid for six months. So I would be encouraging them to speak to us at least three months before their product is due to finish."

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