Should I Remortgage My House?

Should I Remortgage My House?

To remortgage or not to remortgage? It’s a legitimate question and there are definitely reasons to go down either path. Remortgaging at the right time can save you lots of money but if your mortgage debt is pretty low, you’re less likely to save any money at all. Below we’ll discuss the pros and cons to remortgaging but first a few simple tips to consider before you decide.


All good deals require some shopping around and that goes for mortgages as well and hiring a mortgage broker can help with the shopping around strategy. Consider hiring one. They understand the nuances of affordability and credit scores that lenders want. So they are able to match you with a great mortgage specific to you.


Before remortgaging, checking your credit score is also a good idea. You want it as high as possible before talking to a lender. Try not to apply for anything where they check your credit a few months before your remortgage process begins. Every time your credit is checked it can have a slight negative effect on your score.


Here are some reasons to remortgage.


  • Your current deal is about to end. A great deal on a fixed rate, tracker or discount mortgage only lasts between 2-5 years so if yours is about up, now is a good time to shop for a new one and save some money. If you do nothing, your lender will put your loan on it’s SVR, standard variable rate, and that’s usually higher than what you’ve been paying. Start looking around for a new mortgage about 6 months before your current deal is about to end.


  • You want a better rate. Even with the slight exit fee or penalty for switching mortgages before the initial deal is up, you can save huge sums of money by finding a mortgage with a better rate. Take all the fees into account and compare and contrast with what your future new mortgage payments will be.

  • You want to make a big payment. Some lenders won’t let you pay more than the agreed upon payment amount in your current deal. Perhaps you’ve come into some money or got a raise at the office, remortgaging can save you tons. Not only will you lower your loan size by offering a bigger down payment but you might be able to find a better rate as well. 


  • You want a flexible mortgage. Guess what? A mortgage holiday is a real thing. Let’s say, for whatever reason, you want to skip a few mortgage payments. Well, there are mortgages that will let you do that. Shop around but be careful because rates tied to these deals are higher.


Here are some reasons NOT to remortgage:


  • Your mortgage debt is small. There are fees associated with remortgaging so if the fees are higher than what you’ll save in the end, obviously switching mortgages is not the right decision for you. Doing your homework always pays off.


  • You’ve got credit problems. Unfortunately, lenders discriminate against people with low credit scores. If your credit has dropped dramatically since getting your last mortgage it will be worth it to sit tight and work on bringing your credit score up.


  • Your home’s value has dropped. Now, you must play the waiting game. Housing values fluctuate and hopefully, yours will be on the way up soon. If your debt is higher than your property value you will not save money by remortgaging.


Good luck and happy mortgage season.



Ben Ashworth

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