(And why is everyone always going on about it?)
If you’ve noticed more remortgaging chat than usual in recent years, that’s because of interest rate volatility. Essentially, while the UK’s base rate (as set by the Bank of England) swings up and down, we all want to reassure ourselves that we’re on the best possible rate we can be, for as long a period as possible. That way, we’re covered if the rates do something bonkers. In challenging times, we want a little slice of stability.
Interest rates have calmed down a bit now, but it’s always a good idea to shop around, just as you’d shop for any major purchase (and indeed, your home is likely your most major purchase). So, if you have a deal that’s expiring soon (most of them do after two or five years), ready to drop you automatically on to – horror – your lender’s Standard Variable Rate (SVR), it’s time for your mortgage broker to start assessing the situation. Or, in other words, six months before your current deal is going to end, get in touch with Pagoda. If you’re still a way off, mark your calendar now.
We’ll start taking a look at whether it’s going to be better to switch products with your existing lender, or move to a new one. The six months’ leeway is important because the latter option requires a brand new mortgage application, with all the documentation and legal work that entails.
There is always a bit of digging to be done on our side, because although a straight product switch is more straightforward, some remortgage products offer cashbacks and other extras that make a move worthwhile. If you’re moving lenders, we might need to think about affordability again, which means some streamlining of your expenses and zhuzhing of your credit score might be in order. See our blog about getting mortgage-ready for more on that.
So, the most common reason to remortgage is because your friendly rate is running out, but there are others:
You want to (finally) do your bathroom
If your to-do list of home improvements is getting longer and the savings pot isn’t getting bigger, you may want to remortgage to release equity from your home. Talk to your mortgage broker at Pagoda about this one, so we can make sure you’ll comfortably be able to afford your new repayments. If a remortgage isn’t right, we can also look into the possibility of a ‘further advance’.
You just want a better rate
Perhaps your deal isn’t ending yet, but your circumstances have improved and you’d just like to look into the possibility of finding a better rate. In some cases, it can be worth paying early repayment charges to get a better deal. But we’ll need to go through the details together.
You need a bit more flexibility than you’ve currently got
If all is going well with your repayments, but your earnings are inconsistent across the year, you might like the option to pay off extra bits of your mortgage in chunks or take occasional payment holidays. If your current lender does not allow this, let’s see if we can find a way to give you more control.
If you want to talk to a mortgage broker about your current circumstances, you’re very welcome to give Pagoda a call for no-obligation advice, any time.
*This blog contains information that was correct at the time of publication, but is subject to change.