Reasons to Remortgage

These days, finding ways to save money is at the forefront of many people’s minds. Whether you are buying a car, a computer, a house or a mortgage, knowing what else is available in the marketplace is an integral part of the decision-making process. If you are currently a homeowner, looking at remortgaging could save you money, provided you choose the right mortgage product.

There is more to remortgaging than just finding a better interest rate though. Below are some of the reasons for remortgaging.

Home Improvements

Choosing to extend or renovate your current home can be far more cost effective than moving. Think about it – you save on estate agents’ fees, legal fees and avoid one of the most stressful experiences life can throw at you, if you choose to stay put. Remortgaging to carry out home improvements can also be a good investment if the value of your property is increased as a result, as you are more likely to get a return on your investment when you come to sell it. It goes without saying though, not all home improvements add value to a property, and the value can still fall if the housing market deteriorates.

Release Equity in Your Home

Equity release is one way of realising the increased value of your property when the housing market rises. With a house being the most valuable asset many people will ever own, unlocking some of the capital tied up in it could help with other expenses, such as paying for a new car. You can often release further equity in your property by remortgaging, but it’s a step that should be taken with caution, as it increases the amount borrowed against your property.

Find a Better Interest Rate

This is possibly the most common motivation for seeking to remortgage. Seeing your monthly repayments falling and your wage packet going further is a strong motivator for many to seek a remortgage deal with a lower interest rate. If you’ve been on a fixed rate deal that is coming to an end, comparing mortgage rates available is a prudent move, and could leave you with more disposable income each month.

However, doing some calculations to work out the total cost over the mortgage term is arguably just as important as finding a low interest rate remortgage deal. If you’re looking to switch your mortgage part way through the term of your current deal, make sure you find out about any penalties for switching either product, or lender. To get an idea of what your future payments might look like if you remortgage, use our FREE remortgage calculator tool.

Debt Consolidation

If credit card debts, or personal loans are placing a strain on your finances, remortgaging to release funds to pay off or consolidate these debts into one monthly payment is one option to consider. Whilst many people choose to remortgage for debt consolidation, it should be noted that doing so increases borrowing against your property and it may take longer to pay the mortgage off.

Changing financial circumstances

We all know that life throws up surprises, some less welcome than others. If your financial situation changes, perhaps through illness or job loss, paying the mortgage can become a strain. One of the worst things to do is to simply sweep the problem under the carpet – talking to your lender about the available options if you are having difficulty meeting your mortgage payments is vital. It may be that they can help, by allowing you to remortgage your current loan.

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