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Guide to remortgaging

Thu 01 Feb 2018

The Bank of England has signalled that interest rates could now rise sooner than previously thought and economists are predicting that we could have a rate rise as early as May. In addition, the scheme which allowed banks and building societies to access cheap credit from the Bank of England comes to an end shortly.

Most experts are predicting that these combined events will lead to the end of lower-rate mortgages and borrowers should act now to secure the right deal for them.

Based on this, now could be a great time to review your current mortgage and consider if it’s the right time to remortgage. Here are our top tips to help you with your decision process:

Why should you consider a remortgage: Most people choose to remortgage to save money usually because they have come to the end of their current deal. But there could be other reasons, such as switching from a lender’s standard variable rate or to release equity from the property for home improvements.

Check out your current mortgage: Before you start the remortgage process have a look at your latest mortgage statement. This will show your balance, monthly repayment and details of your current rate. If you are coming to the end of your current deal, it’s important to act quickly before you move to a variable rate which could cost you more.

Shop around: Don’t feel you have to stick to your current lender – it’s worth contacting them in the first instance to see if they can offer a good deal but remember other lenders could have something even better.

Think about the overall cost: Use a mortgage repayment calculator to compare what your new monthly payments could be against your existing costs. Make sure that you also consider the various fees that could be incurred as part of the remortgage process, including exit fees from your current lender, legal (conveyancing fees), and arrangement and valuation fees for the new mortgage.

Consider your options: Think about what type of mortgage deal would best suit you. Your choices include a fixed rate, where payments will remain the same regardless of base rate changes, a variable rate, where your payments could go up and down, or a more flexible product that will allow you to make overpayments.

What features suit you: Alongside the rate, take time to look at the features and benefits of the mortgage deal – such as can you make overpayments or take payment holidays – to make sure that all your requirements are met.

Seek independent advice: You can research the market yourself but this can be very time consuming and complex. Consider contacting a mortgage adviser who can help you find the deals you qualify for and guide you through the process. Some mortgage advisers also have access to special deals that may not be available on the high street.

Here at Police Mutual we offer a mortgage advice service, which offers access to the whole of the mortgage market – over 80 leading UK lenders and there is no charge for our advice.

To find out more and to book an appointment call the team today on 0800 652 8984 or enquire online.

Mortgage Excellence Plc (MEX), trading as Police Mutual, is registered in England & Wales No. 03527577. The registered office for MEX is Alexandra House, Queen Street, Lichfield, Staffordshire WS13 6QS. MEX is authorised and regulated by the Financial Conduct Authority. For your security, all telephone calls are recorded and may be monitored. Calls to 0800 numbers are free from UK landlines and mobiles.

Type of article: Articles
Category: Owning a house

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