When you remortgage, you are switching your mortgage to another deal, and frequently another lender.




Remortgages can be used for various reasons, most people switch mortgage simply because it will work out cheaper for them. One of the main reasons for this is that the introductory discounted interest rate may have finished with your current lender; therefore, it is possible that you would be able to get a lower of interest or a bigger discount with another lender.

Another reason that people remortgage their house is in an attempt to consolidate their debts, by way of taking out a mortgage for a larger amount than was owed on the existing mortgage.

It is possible to remortgage up 95 per cent of the value of your property, however if you have already paid off a large proportion of your mortgage, it may be better for you to consider an Equity Release Plan rather than a remortgage.

Getting a remortgage is something that almost all mortgage borrowers have to do, apart from those that make enough money to pay off all of their loan at once, or those rare borrowers who choose long-term fixed-rate mortgages.

The remortgage process is relatively simple, and many borrowers remortgage once every couple of years to get the best rates. Studies have indicated that those who remortgage regularly are likely to spend less on interest over the life of their loans compared to those who allow their mortgage to revert to standard variable rates.




Why remortgage?

Whether you have a fixed-rate mortgage, a tracker mortgage or another type of discount rate, your mortgage will likely be set at a special rate for a limited period of time. Typical examples include a two-year fixed-rate mortgage or a three-year tracker mortgage. When this special period comes to an end, mortgage holders have to choose a new deal or their mortgage will revert to the lender’s standard variable rate, usually considerably higher than special deals.

How does a remortgage work?

Mortgage holders search for the most competitive loan possible to choose where to remortgage to. Depending on the near future, different mortgage products will represent better or worse value, and it is up to the consumer to predict this or rely on an independent financial adviser.

For instance, if interest rates are to climb during the special deal period, a fixed-rate mortgage will protect the borrower from rate rises and ensure a guaranteed level of repayments. However, if interest rates are going to fall, a tracker mortgage will follow Bank of England base rate down, potentially providing cheaper mortgage repayments. Other special deals such as variable rates and discounted rates may represent good value for some borrowers.

England

Wales

House Price

Min£50,000

£50,000

Max£600,000

Deposit

Min (5% of house price)£2,500

£2,500

Max (30% of house price)£15,000

Interest Rate

Min2.00%

3.50%

Max6.00%

Term

Min25 Years

30 Years

Max35 Years

This calculator is provided to give you basic guidance only. This information is computer-generated and relies on certain assumptions. It has only been designed to give a useful general indication of costs. Its important you always get a specific quote from the lender and double-check the price yourself before acting on the information. We cannot accept responsibility for any errorsand recommend that you obtain exact figures from a specific lender before committing to any mortgage.

Mortgage Calculation

Your deposit£2,5005%
Your mortgage£47,50095%
 
Monthly Payment£213.30 

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