The benefits of remortgaging: Can you save money?
Sponsored feature | Rachel Sackel, Mortgage Advice Bureau
When it comes to the benefits of remortgaging, the most appealing one for the majority of people in the current climate is the potential to save money. So could you save cash by remortgaging? We’ve put this article together to explain what you need to know.
What does remortgaging mean?
In a nutshell, remortgaging is when you switch the mortgage on your current home from one lender to another. Your new mortgage will replace your old one. It’s a bit like when you are looking for a new mobile phone and you’re comparing different deals: when you remortgage you shop around to make sure you have the right deal for you.
And if you remortgage onto a deal that’s much better than your previous one, it has the potential to save you a significant amount of money.
Benefits of remortgaging: Why do it now?
The Bank of England has increased the base rate four times since December, taking it from 0.1 per cent to 1 per cent.
If you are on a tracker mortgage, when the base rate increases so will your monthly payments, while if you are on your lender’s standard variable rate, the amount you’ll pay each month might change too, although it’s a bit more complex because the rate you’re on can change at the lender’s discretion. This means they could pass on all of the increase, some of it, none of it or they could hike it by more if they wish.
So if you’re on a tracker mortgage or your lender’s standard variable rate you may consider remortgaging onto a fixed deal to lock in a rate.
If you are already on a fixed-rate mortgage the amount you will pay on your mortgage each month will remain the same until your deal ends. However if your deal ends in the next few months, you may consider shopping around now for a new deal to move onto once it ends.
Remortgage deals: How much could you save?
The amount you could save by remortgaging will depend on a number of factors. You will need to take into account the rate you’re currently on as well as the rate you are able to secure. You will also need to bear in mind any fees you may need to pay if you remortgage such as an early repayment charge, if applicable.
But don’t worry about trying to work out all the calculations yourself because our team of experts is here ready to help and they will do the sums for you. They will explain the remortgage deals available to you and talk through any fees and savings.
What are the other benefits of remortgaging?
While saving money is the main focus, for many homeowners there are lots of other potential benefits of remortgaging.
So what are the other reasons why people remortgage? These include:
- Releasing equity to fund home improvements
- Releasing equity to pay off debts
- Wanting to make more overpayments on your mortgage than the deal you’re on allows
- Your current mortgage deal is up for renewal soon.
How much could I borrow?
If you would like to get an idea about how much you would be able to borrow check out our remortgage calculator at https://www.mortgageadvicebureau.com/mortgage-calculators. And to find out about what remortgage deals are available, or if you have any questions about remortgaging, then speak to our team of expert advisers. Call us today on 07375 886347 or visit our website at mortgageadvicebureau.com/cambridge.
You may have to pay an early repayment charge to your existing lender if you remortgage.
Because we play by the book we want to tell you that your home may be repossessed if you do not keep up with repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances, but a typical fee is up to 1 per cent of the amount borrowed.