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Contact Your Local Branch
BELFAST, CITY CENTRE: 028 9013 7392
BELFAST, EAST OFFICE: 028 9560 9410
BELFAST, ORMEAU ROAD: 028 9521 9349
BELFAST, LISBURN ROAD: 028 9521 9351
DROMORE: 028 9210 6060
LISBURN: 028 9279 4300
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LURGAN: 028 3898 4004
COOKSTOWN: 028 8673 1055
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COALISLAND: 075 6180 7334

Why You Might Want to Think About Remortgaging

by | Feb 13, 2024 | Uncategorized | 0 comments

Ever thought about remortgaging? It’s basically when you decide to switch up your mortgage for a new one on a property you already own. Most folks consider it when they’re looking to cut down on their monthly expenses, especially after their current mortgage deal ends and they’re stuck with their lender’s higher standard variable rate. But, slashing your monthly payments isn’t the only reason to give remortgaging a go. As a leading mortgage broker on Lisburn Road in Belfast, we’ve put together this handy guide to shine a light on the various reasons you might want to consider remortgaging. We’re here to make sure you have all the info you need to see if this strategy aligns with your financial and personal goals.

What Exactly is Remortgaging?

In simple terms, remortgaging means replacing your existing mortgage with a brand new one. This can be done with your current lender (though that’s technically called a product transfer) or by switching to a different bank or building society.

Lenders often have special deals with attractive interest rates that last for a set period, usually between 2 and 10 years. Once your fixed-rate deal wraps up, if you don’t take action to remortgage, you’ll automatically be moved to your lender’s standard variable rate (SVR), which is often significantly higher.

Why Consider Remortgaging?

There’s a handful of reasons why remortgaging could be a smart move. Maybe you’re eyeing a lower mortgage rate, your credit score has gotten a nice boost, the value of your home has shot up, or you’re looking to make changes to who’s on the mortgage with you. Let’s break down each of these reasons:

Chasing a Lower Mortgage Rate

The top reason many jump into remortgaging is to snag a better mortgage rate. With the Bank of England’s base rate climbing up 14 times consecutively, borrowing costs have soared. This means if you’re on a variable rate mortgage, like the SVR, you’re likely feeling the pinch.

Switching to a fixed-rate mortgage could be a game-changer, potentially lowering your monthly repayments. Right now, the average 2-year fixed mortgage rate is around 5.95%, and for a 5-year fix, it’s about 5.57%. Compare that to the average SVR of 8.2%, and you can see why making the switch could be a wallet-friendly move.

Choosing the right mortgage broker on Lisburn Road in Belfast can make all the difference in securing a favourable remortgage rate, potentially saving you thousands over the life of your mortgage.

Your Credit Score Has Improved

If your credit score has gotten better since you last secured a mortgage, remortgaging could unlock better interest rates for you. It’s like getting a high score in a video game and unlocking a new level – in this case, potentially cheaper borrowing. Check your credit score for free with Equifax, ClearScore, or Experian to see where you stand.

The Value of Your Home Has Increased

If your home’s value has gone up significantly, remortgaging can give you access to lower interest rates. This is because the loan-to-value ratio (LTV) – the size of your mortgage relative to the value of your home – will have improved. Plus, if you’ve built up equity in your home, remortgaging allows you to release some of this money, which you can use for home improvements, to pay off debts, or to help a family member with their property goals.

Making Changes to Your Mortgage

Need to add or remove someone from your mortgage? Remortgaging can make that happen. Whether it’s due to changes in your personal life or financial strategy, this process, known as a transfer of equity, can adjust your mortgage to fit your current needs. Just remember, lenders will want to make sure you can afford the mortgage on your own if you’re removing someone.

Our dedicated mortgage brokers on Lisburn Road in Belfast take the time to understand your unique financial needs, providing personalised advice to help you achieve your homeownership goals

How to Go About Remortgaging

Whether you’re sticking with your current lender or looking for a new one, remortgaging involves a few steps. If you’re staying put, it’s relatively straightforward – just pick a new deal from your lender’s offerings. But if you’re switching, you’ll need to apply for a new mortgage, have your property valued again, and sort out the legal paperwork, possibly with the help of a solicitor or conveyancer.

Looking for the best remortgage deal? Our award-winning team can help. We’ll scour the market to find the best rates for you and guide you through every step of the process, making remortgaging as smooth as butter.

Getting Started with Remortgaging

Ready to dive into the remortgaging process? Here’s what you need to know about the costs and the best timing to make your move.

The Costs of Remortgaging

While remortgaging can save you a tidy sum over time, there are a few upfront costs to consider. If you’re leaving your current mortgage deal early, watch out for an early repayment charge (ERC). This fee can vary, but it’s something like being penalised for leaving the party too early. For example, bowing out of a 2-year fixed rate in the first year might cost you 2% of your mortgage balance.

Switching lenders? There’s usually an administration fee to release the mortgage deeds, not to mention potential lender arrangement fees for setting up your new mortgage. These fees are the entrance fee to your new, hopefully cheaper, mortgage deal. You’ll also need to budget for a property valuation and legal fees, which depend on the value of your home.

Timing Your Remortgage

When’s the best time to make your move? Ideally, when your current fixed rate deal ends to avoid those pesky ERCs. But you don’t have to wait until the last minute to start looking for a new deal. In fact, you can start your remortgage application three to six months before your current deal expires. This gives you plenty of time to shop around, compare rates, and decide without having to rush.

Remember, remortgaging isn’t just about getting a lower interest rate. It’s about making your mortgage work better for you, whether that’s improving your cash flow, consolidating debts, or adjusting your mortgage to reflect changes in your life or financial situation.

Why Wait? Let’s Get Started!

Avoid the stress of remortgaging by letting our expert mortgage broker on Lisburn Road in Belfast handle everything from the initial application to the final paperwork. 

Our team at The Mortgage Clinic on Lisburn Road in Belfast is here to help. We find the best deals and make the process as smooth as possible. From researching the best rates to managing your application, we’ve got you covered.

Ready to find out more? Get in touch with us today and let’s make your remortgage journey a success.

Helmut Elstner

Managing Director – Independent Mortgage Broker and Insurance Advisor

Helmut started working in financial services in early 2012 and founded The Mortgage Clinic in Belfast in early 2015. He specialises in all types of mortgages from First Time Buyer, Co-ownership, Self Build, Home Movers, Remortgages, Debt consolidation, to Buy to Let.

Three Best Rated Winner 2021
Winner Mortgage Broker of the year 2020
Top Rated Advisor 2021 on Vouchedfor