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Remortgaging is where you move your mortgage from one lender to another by paying off the original mortgage with the proceeds of the new one, using the same property as security.
Remortgaging doesn’t involve moving house, but it could save you money. If you want to find a new deal because your existing one is coming to an end, changing your current mortgage from one lender to another is a simple process. And while it may seem like a hassle, it really doesn’t have to be, particularly if you use the help of a mortgage broker.
What are the benefits of remortgaging?
- You could reduce your monthly repayments
- You might release some of the value in your property
- To find a more suitable product due to a change in your circumstances.
- Check out our useful Guide to Remortgaging – it will help you focus on what’s involved.
Want a better deal on your current mortgage?
Mortgage Advice Bureau will search the market to find the right deal for you. They offer impartial advice and a dedicated advisor who will take you through every step.
Whatever your situation, if you have any questions or just want to see if you can get a better mortgage rate, their mortgage experts can advise you on what to do. Simply call 01664 494100 or visit our Mortgage Advice Bureau website.
Remortgaging Q & As
Can I remortgage more than once? In theory you can remortgage as often as you like. However, you do need to consider the fees and charges and calculate whether it is worthwhile.
Will remortgaging affect my credit rating? Each application you make for any type of credit is shown on your credit file. The more applications you make, especially if they are unsuccessful ones, the less likely it is that your next one will be accepted because it may affect your credit rating. All lenders will tell you if and when they check your credit rating.
What information is needed if I am self-employed? Most lenders will require you to provide them with a minimum of 1 year and up to three years’ audited accounts, or proof of income from the Inland Revenue. If you cannot provide these, the lender will want to know why. If you are newly self-employed, consider using a specialist broker, as it may be difficult to get a deal, particularly at the rate you want.
My mortgage loan amount is very low, is remortgaging still worthwhile? You will need to weigh up the costs (charges and fees) against the savings you will make in reduced payments, over the term of your loan. If you only have a small mortgage, you might be better off sticking with your current lender.
Can I remortgage to free up money for home improvements? Providing you’re in a position to borrow extra mo ey when you remortgage, subject to status and affordability, you can do so for this reason. Many people do borrow more for home improvements when they remortgage and the added benefit is that you will probably increase the value of your home in the long term.
When I remortgage can I change to a repayment? (capital and interest) Yes you can as you are starting a completely new mortgage. This would be an excellent time to reassess your financial situation and opt for a repayment mortgage giving you the peace of mind that you are paying off the capital as you go.
Some lenders may allow you to split your mortgage, so a part is on an interest only basis and part is on a repayment (capital and interest) basis.
What if the value of my home has changed? If your home has increased in value during the period of your mortgage, you may be able to borrow more by releasing equity from your property for home improvements, to make a large purchase or consolidate debt, for example.
Remember though that the best remortgage deals are usually those with the lowest loan-to-value ratio so bear this in mind if you’re considering borrowing a higher percentage of your property’s current value.