Is Now the Right Time to Re-Mortgage Your Home?

Switching your mortgage can seem like an intimidating process, however the process is relatively straightforward, and many homeowners with a mortgage will choose to do so at one time or another. The rate of interest set by the Bank of England has remained below one per cent since 2009 – these historically low-interest rates have enabled buyers and property owners to access better mortgage rates and deals in recent years.

What is re-mortgaging?

Re-mortgaging involves taking out a new mortgage on a house you already own by either replacing an existing mortgage or in order to borrow money against your home. When you re-mortgage, you can either stay with your current mortgage provider or change to a new one – what is the best option will depend on your particular circumstances, so you should research the options available to you before making your decision. It is worth noting that you should speak to your existing mortgage provider before committing to re-mortgage as there can be fees if you proceed further.

When can I re-mortgage?

This will depend on the terms and conditions of your existing mortgage and your reasons for wanting to re-mortgage. If your current mortgage is fixed-term, you might incur fees depending on the timing of your re-mortgage. It is always recommended to speak to your lender directly for guidance on your existing mortgage to help you decide if re-mortgaging is the right decision for you.

Why should I re-mortgage?

Re-mortgaging will be a good option if you can get a better deal than the one you currently have. Typically, this will be when there is a mortgage available where you will pay less interest and lower fees, or with more flexibility – for example, where you can make greater overpayments.

You might also want to re-mortgage if:

• Your current mortgage is about to end
• You want to find a better rate
• Your property has substantially increased in value, and you wish to release some equity
• You want to overpay, but your existing mortgage doesn't allow you to
• You’re concerned about interest rates going up
• You want to borrow an additional amount to carry out work on your property

While these are all reasons to re-mortgage, doing so might not be the best decision depending on your circumstances. You should proceed with caution if:

• You have a small mortgage debt – in this case, it might not make financial sense to change
• Your existing mortgage has high charges for early repayment
• The value of your home has dropped
• You have very little equity
• You’ve had credit issues since you took out your existing mortgage

Tips for re-mortgaging

• Do your research – ask your existing lender about any new deals on offer and speak to a mortgage broker
• Do your sums – consider both interest rates and exit and set-up fees
• Understand what’s involved – speak with a professional before committing to re-mortgaging

Contact our Residential Conveyancing Solicitors in London, Addlestone, Ashford, Chiswick, Surrey & Middlesex

For advice on re-mortgaging your home, call our residential conveyancing team today or complete our online enquiry form.