Is remortgaging a good idea?

Remortgaging can be a good idea if you want to avoid the standard variable rate, borrow more money, or pay off your mortgage quicker.

It involves switching your mortgage debt to a new lender. You can save money if your new rates are cheaper than your old rates - after fees.

My current mortgage deal is about to end

Lots of lenders will only offer a fixed-rate mortgage for a set number of years – usually 5 or less. After this, they’ll move you to a Standard Variable Rate mortgage, which is twice as expensive on average.

If your mortgage deal is about to end, it’s worth looking around for another one to ensure your payments don’t go up.

I need to borrow more money

Remortgaging and increasing your debt can get you a large lump sum. You can use this money for home improvements or an extension, which may be cheaper than moving to a new, bigger home. Your new lender may ask for evidence, like a builder’s quote so they know how you are going to use the extra money.

If you're planning on doing something riskier your remortgage application may be rejected. Common reasons for rejection include starting your own business.

I want to spend less each month

If you’re looking to reduce your monthly repayments, remortgaging could find you a lower rate.

Be aware your current provider may hit you with an early repayment charge.

These can be very high – especially in year one – but if you’re ending your fixed rate period in the next 6 months, it’s the ideal time to look at remortgaging.

Explore your options. You can start on our remortgage page.

I want to spend more each month

If you’ve had a change in financial circumstance, like a pay rise since your mortgage started, you may want to pay off your mortgage quicker.

It’s called overpaying, but lots of deals don’t allow you to do it. And if they do, it’s likely to be a small amount each month or you will be charged. In lenders’ eyes, the longer you owe them money, the more interest they’re getting.

Remortgaging is a good way to get a new deal based on your new circumstances.

Next steps to getting mortgage ready:

  1. Ensure you know how much your current property is worth, and how much is left on the mortgage
  2. Look at your current deal and your lender’s SVR
  3. Complete the Mojo Mortgage Matcher to find out what your new mortgage might cost
Share this post