What is a remortgage?

31st August 2021

What is a remortgage?

There is a lot of conversation about remortgaging, but what does it actually entail and who can do it? We have asked our resident remortgage expert, Gavin Torpey, to break it down:

 

What does “remortgage” actually mean?

A remortgage is when you take out a mortgage from a new lender to repay your existing lender and the balance.

 

Why do people remortgage?

The reason remortgages are popular is you can normally get a lower interest rate and better all-round deal, by going to a new lender rather than staying with your existing provider (depending on your circumstances).

 

When should I remortgage?

You can remortgage at any time, however it may not always be the right time. You may want to consider:

  • When your current fixed rate mortgage deal ends
  • When you can save money by remortgaging, even after paying arrangement and exit fees.
  • When you own enough equity in your current property.

 

When shouldn’t I remortgage?

When weighing up whether to remortgage, you need to consider money, timing and your personal circumstances, as well as the following scenarios:

  • If you have a very high early repayment charge and it would be cheaper to wait until the end of the incentive period
  • If you have a very low level of equity in your current property, you may find it difficult to get an improved mortgage deal

How do I remortgage?

You can remortgage with a bank, building society or specialist mortgage lender, and a mortgage adviser with access to several products and lenders will be able to advise you on what’s most suited to your current circumstances.

Are there costs involved in remortgaging?

The costs involved in remortgaging will depend upon your individual circumstances. Possible costs to look out for are:

  • Early repayment charge to your existing lender
  • An exit fee to your existing lender
  • Possible mortgage fees to your new lender
  • Possible fees including valuations, conveyancing and mortgage
  • Potential mortgage adviser fee

Do I have to wait until my current product ends and I’m on my current lender’s SVR before I can move to another product?

Some lenders will allow you to apply for your next product up to six months in advance, meaning that you can move seamlessly between one product and another. This means you may be able to avoid going onto your lender’s SVR, which could be a higher interest rate than either your existing or new product, so this could save you money.

This does vary from lender to lender though, so if you want to ‘book your rate in advance’ then make sure you tell them as soon as you can so that they can look at the options available to you.

 

If you are still unsure, or are looking to remortgage please don’t hesitate to contact any member of our team on 03454 500200, or click here for more info.

With mortgage brokers in Winchester, Southampton, Farnham, Bishops Waltham, Alton, Chandlers Ford, Alresford, Romsey and Park Gate, you are never too far from mortgage advice.

 

You may have to pay an early repayment charge to your existing lender if you remortgage. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

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My wife and I have been working with Chawley Soper fpr many years. We've had 6 properties, with the very first when we remortgaged our original home and let it to downsize and buy a bungalow. We then bought an investment property to renovate and sell. The next property we bought and rented and then recently we invested in a 4 bed bungalow as another rental/investment property. Chawley has always been there through the years working on our behalf to get us the best deals and guide us through the mountains of paperwork and correspondence with solicitors. We can't really praise him highly enough. Not just his phenomenal knowledge and professionalism but for always being there to deal with even the smallest of queries and problems. Through buying, selling and remortgaging and finding the best deals we feel as though we are in very safe hands and trust Chawley implicitly. If we have any ideas about future moves, such as recently we considered selling and porting to a new property, it will be Chawley who will guide us. We've had one other property from before our association with Chawley and he now deals with all of the remortgaging for this as well. We feel as though he has become far more than just a mortgage adviser and we fully recommend him.

Andy S

May 2020

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