What is remortgage?
A remortgage is the process of switching your existing mortgage deal to a new deal and potentially a new provider. You’re not moving house and the mortgage is still secured against the same property. You can remortgage to get a better rate or to raise capital.
Why should you remortgage?
Here are some reasons that you may decide to remortgage;
- To take advantage of a new, lower rate
- To consolidate debts
- To fix and reduce your monthly outgoings
- To raise capital for home improvements or property investment
Taking a new deal can potentially save you money, depending on the new deal. You also have to opportunity to raise more capital to consolidate debts or to complete home improvements. Releasing equity can be an efficient way to raise a cash lump sum but you should always seek advice when securing more debt against your home.
When should you remortgage?
Remortgaging is typically done when you are approaching the of your current mortgage deal, which could be a fixed rate for a period of 2 to 5 years. At this point, it makes sense to look for a new deal to switch to as the rates otherwise tend to revert back to the standard variable rate (SVR) and these can be significantly higher than the fixed rate you were on initially.
How should you remortgage?
You should think of your mortgage in the same way you think about your car insurance; always shop around for the best deal you can find. One of the best ways to do this is to consult a mortgage adviser or broker. You may find that you are paying far too much on your current deal.
At this time mortgage rates are at an all-time low so there has never been a better time to shop around.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
