How Remortgaging Can Help You Save Money

Are you feeling the pinch of rising costs and an uncertain economic climate? With the Bank of England base rate at its highest level since 2010 and inflation still above 10%, it’s no surprise that many are feeling the strain of higher expenses for fuel, energy, and everyday basics.

To make matters worse, this year 1.2 million people are coming out of their fixed-rate mortgage deals, which could mean hundreds of pounds in increased payments each year if they don’t take action. If you’re in this group, it’s essential to consider your options and take steps to secure your financial future.

One option that could save you money and help ease the burden of rising costs is remortgaging. In this article, we’ll explain what remortgaging is, discuss the benefits of remortgaging, and explore the reasons why you might consider remortgaging in the current economic climate.

 Whether you’re a homeowner looking to reduce your monthly payments or free up cash for other expenses, or you’re simply looking to save money in the long run, remortgaging could be a smart move. Let’s dive in and explore the possibilities.

Why should I remortgage? – Exploring the Benefits

If you’re a homeowner with an existing mortgage, you might be wondering whether remortgaging is right for you. Here are some of the top reasons why people consider remortgaging:

Save money on monthly mortgage payments

By remortgaging to a new deal with a lower interest rate, you could reduce your monthly payments and save money in the long run. This could be particularly appealing if you’re on a variable rate mortgage, as your payments could go up if interest rates rise.

Switch to a more suitable mortgage deal

Your circumstances may have changed since you first took out your mortgage, and there may be a better deal available that meets your current needs. For example, you might want to switch to a fixed-rate deal to provide more certainty around your payments.

Raise additional funds for home improvements or other expenses

Remortgaging can allow you to access the equity in your home and raise extra cash for home improvements, a new car, or other expenses. This could be a more cost-effective option than taking out a personal loan or using a credit card.

Consolidate debt

If you have multiple debts with high-interest rates, remortgaging could be a way to consolidate them into one more manageable monthly payment. This could help you reduce your overall debt and save money on interest.

How remortgaging can save you money

By remortgaging and taking advantage of a lower interest rate, you could save thousands of pounds over the lifetime of your mortgage. You could also shorten the length of your mortgage term, which could further reduce the amount of interest you pay. Alternatively you could further reduce your monthly outgoings by extending the term of your mortgage however this could mean the overall cost of your mortgage, in the long term, increases.

How can remortgaging save you money – key benefits explained

If you’re considering remortgaging, you might be wondering how it can save you money. Here are some of the ways that remortgaging could benefit you:

• Switching to a lower interest rate: One of the most significant benefits of remortgaging is the ability to switch to a lower interest rate. If your credit score has improved since you first took out your mortgage, or if interest rates have gone down since then, you could be eligible for a better deal. By lowering your interest rate, you’ll reduce the amount of interest you pay over the lifetime of your mortgage.
• Reducing your monthly payments: Remortgaging to a lower interest rate could also reduce your monthly payments, which could free up extra cash each month. This could be particularly helpful if you’re struggling to keep up with your current payments, or if you’re looking to reduce your outgoings.
• Shortening the length of your mortgage term: By remortgaging to a shorter-term deal, you could reduce the amount of interest you pay overall and save money in the long run. You could also pay off your mortgage more quickly and own your home outright sooner.
• Consolidating high-interest debt: If you have multiple debts with high-interest rates, remortgaging could be a way to consolidate them into one more manageable monthly payment. By paying off your other debts, you could save money on interest and reduce your overall debt burden.
• The costs of remortgaging: It’s worth noting that there are costs associated with remortgaging, such as arrangement fees, legal fees, and valuation fees. However, these costs are often offset by the potential savings you could make over the lifetime of your mortgage.

Is remortgaging right for me? – Factors to Consider

If you’re considering remortgaging, you might be wondering how it can save you money. Here are some of the ways that remortgaging could benefit you:

Early Repayment Charges (ERC)

If you’re currently on a fixed-rate mortgage and you want to switch to a new deal before the end of the term, you may have to pay early repayment charges. These charges can be substantial, so it’s important to check with your current lender before making any decisions.

Arrangement Fees

Most mortgage deals come with arrangement fees, which can range from a few hundred to a few thousand pounds. It’s essential to factor these costs into your calculations when deciding whether to remortgage.

Legal Fees

You’ll need to pay for legal services to remortgage your property, which can cost several hundred pounds. However, you may be able to reduce these costs by using a conveyancing solicitor that’s recommended by your new lender.

Valuation Fees

Your new lender will want to value your property before they offer you a new mortgage deal. This can cost several hundred pounds, but some lenders offer free valuations as part of their remortgage deals.

Is it time to remortgage? – Checklist of things to consider

Remortgaging can be a smart financial move, but it’s not right for everyone. Before you start exploring your options, it’s essential to consider the following factors:

The current value of your property

The value of your property can affect your eligibility for certain mortgage deals. If your property has increased in value since you first took out your mortgage, you may be able to access better rates and deals.

The amount you own on your mortgage

Your outstanding mortgage balance will impact your eligibility for different mortgage deals. If you have a high level of equity in your property, you may be able to access better rates and deals.

your credit score

Your credit score is an essential factor in your eligibility for a remortgage. If your credit score has improved since you first took out your mortgage, you may be able to access better rates and deals.

Your income and expenses

Your income and expenses will affect your affordability for different mortgage deals. Before remortgaging, it’s essential to calculate your monthly income and expenses to ensure that you can afford the new deal.

the overall cost of remortgaging

Remortgaging comes with costs, such as arrangement fees, legal fees, and valuation fees. You’ll need to factor these costs into your calculations to determine whether it’s worth remortgaging.

It’s also important to consider when is the right time to start looking at your options. If your fixed-rate mortgage deal is coming to an end, it’s a good time to start exploring your options to avoid being moved onto a higher variable rate. It’s also worth considering remortgaging if you’re looking to reduce your monthly payments, raise additional funds, or consolidate your debts.

By considering these factors and seeking professional advice, you can make an informed decision about whether remortgaging is the right choice for you.

Get expert advice on remortgaging – our team is here to help

In this article, we’ve explored the benefits of remortgaging and how it can save you money in the long run. By switching to a lower interest rate, reducing your monthly payments, shortening the length of your mortgage term, and consolidating high-interest debt, you could save thousands of pounds over the lifetime of your mortgage.

However, remortgaging is not the right choice for everyone, and it’s essential to consider the costs and benefits before making any decisions. By seeking professional advice and considering the factors we’ve discussed in this article, you can make an informed decision about whether remortgaging is right for you.

If you’re considering remortgaging, our team of experienced mortgage advisers is here to help. We can guide you through the process, help you explore your options, and find the best deal for your needs. We’ll take into account your personal circumstances and financial goals to ensure that you make the right decision.

You may have to pay an early repayment charge to your existing lender if you remortgage. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.