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What is a Remortgage?
Remortgages are a process of changing your current mortgage rate on your existing home to a new mortgage rate. A Remortgage can be with the same lender or a new lender. Mortgage borrowers will normally choose to remortgage at the end of their fixed term which will save them a significant amount of money on early repayment charges.
How do I Calculate the Cheapest Deals & Rates Available?
While searching for the best remortgage rates, the search should include the whole of the market, not just from your current lender. Not limiting your options means you do not miss on mortgage deals available from all lenders allowing you to secure a more suitable deal.
It is common many people look for cheapest remortgage rate or deal and fell to calculate the other cost involve.
While looking for a remortgage rate, always consider any lender product fees that are payable, valuation fees and any other charges. Our mortgage brokers have years of expertise, so we will calculate all charges involved in your remortgage and show you the cheapest rates for your remortgage.
We offer Fee-Free Remortgages, meaning you save on broker fees
Remortgage to 2 years fixed rate or 5 years?
Weather remortgage for fixed rate for 2 years or 5 years does depend on the mortgage market and personal circumstances. 5 years fix rate could offer better security for long term but you could lose if the rates comes down in 5 years. Always speak to expert mortgage broker at MariannaFS
How Does Remortgaging Save Me Money?
When you have a fixed term mortgage it is fixed for a number of certain years. when your fixed term ends, your lender will change your mortgage rate to the standard variable rate (if you do not remortgage). The interest rate of the standard variable rate (SVR) is higher than a fixed term mortgage.
In the current high interest rate market, on average most lenders’ SVR is 2-3% more expensive than a fixed rate mortgage. Going on an SVR rate means monthly mortgage payments could go up significantly. We have seen an average mortgage amounting to £300- £400 in extra expenses If you do not remortgage at the end of the fixed term.
What Remortgage Rates Are Available?
When it comes to remortgages, there are many types of mortgage rates and deals to choose from. Every borrower has different needs and circumstances, and so your chosen remortgage rates should be suitable to your own mortgage needs.
What Are The Major Remortgage Rate Types Are?
Fixed Rate Remortgage
Fixed rate remortgages are more suitable to borrowers who want fixed monthly mortgage payments for a certain fixed term, knowing your mortgage payment won’t go up or down can give you assurance and peace of mind, making it a popular option. Normally, fixed term mortgages offered by lenders are 2,3 and 5 years. These mortgages have early repayment charges if you break the mortgage deal early.
Tracker Rate Remortgage
Tracker rate remortgages will suit someone who is comfortable with interest rates going up, which may increase their monthly mortgage payments. Tracker rates track the Bank of England base rate plus a certain percentage rate set by the lenders. Tracker rate mortgage payments will also go down if the interest rates go down, just like if interest rates go up the mortgage payments will also go up.
Offset Remortgage.
Offset remortgage rates are for someone who has good savings and wants to access these savings anytime. Your savings are used to offset the interest rate charged by the lender. Not many lenders offer offset remortgages, and the rates are also slightly higher than normal remortgage rates. However, these mortgages will help you to pay off your mortgage sooner, meaning there are less payments in the long run.
Discount Remortgage.
With a discount rate remortgage, lenders offer a discount on their standard variable rate (SVR) for a fixed term of 2 to 5 years. During the discount period, you will pay the reduced rate compared to the lender’s SVR. But if the interest rates increase, your discount rate could also go up, and vice versa if the rates go down.
Capped Rate Remortgage.
Capped rates are based off the condition that if the interest rates go down then your mortgage will go down, and vice versa if the rates increase, but this is only to a certain limit set by the lender. If you want to benefit from lower rates, but in case rates increase your payments won’t increase above a certain level, then capped rate remortgages might be for you.
How do I know if I am Eligible to Remortgage?
Your current lender will write to you at the end of your fixed term about the options of remortgaging you may have. It’s worth it to check for any early repayment charges, so make sure you don’t accidentally become eligible to pay them. . Get in touch with your bank or remortgage broker and they will advise you on your remortgage options.
Should I Switch Lenders or Stay with the same one?
Should switch lender or stay with the same one? That will depend on your circumstances and the rates offered by existing lenders. Switching rates with the same lender is called a product transfer, which is an easy process compared to getting a remortgage with a new lender. Always talk to a Fee-Free mortgage broker like MariannaFS to save on broker fees, while never compromising on the service.
How to Improve the Chances of Getting the Best Possible Remortgage Deal?
To improve the chances of getting your best remortgage deal, focus on the following points.
Reduce Your Loan to value.
Lenders offer the best rates to borrowers with lower loan to value mortgages. If you are borrowing in a lower LTV bracket, your chances of getting a high quality remortgage rates are higher.
Improve Your Credit Scoring.
Poor credit score can ruin your chances of getting a great remortgage rate. Improving your credit score can help to secure the better rates of the market, this is because all lenders want to see excellent credit ratings.
Start Comparing Rates Early.
Start looking for remortgage rates as early as 4 months before the end of your fixed term. Comparing the rates from the whole of the market can improve your chances of finding the best remortgage deal.
