What does “remortgage” mean?
Thinking about asking your lender for a new deal? Remortgaging is an option that more and more people are taking in order for them to change their existing deal. In this guide we’ll explain exactly what that decision entails.
A mortgage can last many years, and it is important to think about your financial options thoroughly. The decisions you make when remortgaging are just as important as when you decided on your original mortgage deal.
Even if you have had a mortgage for years, you may still be unsure about the potential benefits of changing lenders and exactly what happens when you remortgage.
There are lots of different options available, with a variety of the best remortgaging rates and incentives.
What is remortgaging?
In essence, remortgaging is the act of switching your existing mortgage to a new deal, either with your existing lender or a different provider. You’re not moving house and the new mortgage is still secured against the same property.
The more equity you have and the lower your loan to value (LTV), the more competitive the rates you’ll qualify for.
There can be any number of reasons for making the switch, including:
- To reduce the interest rate on your mortgage
- To fix your monthly payments and protect against possible future rate rises
- Raising money to carry out home improvements
- Raising a cash lump sum by releasing equity from your home
- Consolidate your debts
Taking a new interest rate could really save you money by taking advantage of a new offer. Another popular reason to remortgage is the option to consolidate all of your debts into one payment – however, be aware that as this means securing more debt against your home it may cost more in the long run, and it’s something you should seek advice on.
Releasing equity from your property can be a good way to raise a cash lump sum, provided you can afford the new repayments.
For detailed information on this, see our guide ‘What are the benefits of remortgaging?’
The days of having your mortgage with the same lender for the whole term are long gone. More and more people are discovering the savings to be had when they make the switch from their old mortgage provider to a new one.
At this current time, when interest rates are at a historic low, especially if you have good credit and have been a reliable borrower, there are good remortgage deals to be had so make sure you shop around for the best rates.
If you think that you are paying too much on your current mortgage, why not start looking for the perfect deal for you? It could save you thousands of pounds in the long run.
Using a fee-free mortgage broker such as London and Country means that you will get independent advice and help to find the best deal for you.
Call us and speak to us about your remortgaging options today.