Reasons to remortgage
There are lots of different reasons to remortgage, but the main reason is to put you in a better financial position whether it be lower monthly payments or using some of the equity in your home to improve your lifestyle.
Worried about interest rates rising
If your current mortgage is on a variable rate or tracker and you are worried that interest rates could increase, then considering remortgaging onto a fixed rate mortgage could save you money and provide a fixed monthly payment for a set period.
Borrow for home improvements
If you are raising money for home improvements, it’s a great time to review your whole mortgage and ensure you have the best terms available.
You want to consolidate loans or credit cards
Borrowing extra money against your home as a debt consolidation mortgage can reduce your monthly outgoings. You should also be aware of the downsides as you could be extending the term of the original debt and end up paying more interest.
You want to overpay on your mortgage
If your lender has penalties for making over payments and you are looking to reduce your mortgage loan, then a remortgage may be an alternative. The costs involved in changing lender should also be weighed up against those penalties.
Your property has increased in value
If your home has increased in value since you purchased it, you may be in a different loan to value bracket. Lower loan to value brackets or LTV’s means you are considered a lower risk by the lender and they may offer you a lower rate of interest.
You are on a Standard Variable rate
If your mortgage is on a standard variable rate, then you could reduce your monthly payments by taking a fixed or tracker rate with a new lender. There may be tie-ins and penalties to consider on the new loan, but they tend to go hand in hand with special low-cost interest rates.