Timing is Key: When Should You Consider Remortgaging?

October 30, 2023

When to remortgage

Remortgaging can be a strategic financial move, but timing is everything. In today’s blog post, we’ll explore four key scenarios when it makes sense to consider remortgaging. While everyone’s situation is unique, these opportunities could help you save money, secure a better interest rate, or gain more control over your finances. Let’s dive into when to make that remortgage decision.

Scenario 1 – Your Fixed-Rate Mortgage Deal is Ending:

When your fixed-rate mortgage deal is coming to an end, it’s a prime time to explore your remortgage options. Typically, around six months before your current deal concludes, you should start looking at alternatives, especially if you’re on a fixed or tracker deal. Failing to remortgage may result in being placed on your lender’s standard variable rate (SVR), which is usually significantly higher than your current rate.

Scenario 2 – Rising Interest Rates and the Fear of Missing Out:

While not necessarily time-specific, many homeowners have chosen to remortgage early amid the fluctuating mortgage landscape of 2022 and 2023. The goal is to secure a better rate and protect against rising interest rates. However, keep in mind that early repayment charges may apply, so carefully assess the costs before making the decision.

Scenario 3 – Accumulated Equity in Your Home:

If your home has appreciated in value since you purchased it, you might have built up a substantial amount of equity. This means that the value of your mortgage loan is now a smaller proportion of the total property value. As a result, you may qualify for more competitive rates with a lower loan-to-value ratio. This is particularly advantageous when property prices are on the rise as a general trend. Consider getting your home appraised to see if you can secure a better deal. Once again, be vigilant for early repayment charges.

Scenario 4 – When You Want to Overpay and Your Lender Won’t Allow It:

Sometimes, homeowners want to pay more toward their mortgage to reduce the overall interest and shorten the loan term. If your current lender restricts overpayments, it could be an ideal time to remortgage with a new lender. This allows you to reduce the total loan amount and potentially secure a more cost-effective outcome.

While there isn’t a one-size-fits-all answer to the best time to remortgage, specific circumstances create well-timed opportunities. Whether you’re nearing the end of your current deal, concerned about rising interest rates, have built up equity, or want to overpay, remortgaging can be a strategic move to improve your financial situation.

If you want to explore your remortgage options further or have questions, feel free to contact our team at 01925 573 328.

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