In today’s uncertain financial climate, getting the most out of your mortgage isn’t just wise, it’s essential. Whether you’re a first-time buyer reassessing your options or a long-time homeowner looking to reduce monthly outgoings, exploring remortgage deals could be your smartest move yet.
This article dives into real-life examples and practical tips to help you navigate the remortgage market with confidence. Because let’s face it: every pound saved counts, especially when it’s hundreds saved monthly.
Why remortgaging matters now more than ever
Interest rates have fluctuated wildly over the past few years. What started as rock-bottom base rates post-pandemic has slowly crept up, leaving many households facing the end of fixed-rate terms and stepping into far more expensive variable rates.
This is where the right remortgage deals come into play. A well-timed switch can help you avoid costly repayments and even release equity for home improvements or other financial goals.
Case Study: Sarah from Milton Keynes – Slashing monthly costs
Sarah, a primary school teacher, bought her three-bedroom semi in 2019 with a two-year fixed mortgage at 1.89%. When that deal ended, she found herself staring down the barrel of a 6.5% standard variable rate.
“I was panicking,” she admits. “My monthly payments were set to jump by £320.”
She spoke with a mortgage broker and discovered a new fixed-rate remortgage deal at 4.2% over five years. The savings? A whopping £280 per month.
“I wish I’d acted sooner,” she says. “But I’m glad I didn’t wait any longer.”
When is the right time to remortgage?
Most lenders allow you to start the process up to six months before your current deal ends. Acting early gives you the opportunity to lock in favourable rates before potential hikes.
Ask yourself:
- Is my current fixed deal ending soon?
- Has my property increased in value?
- Do I need to borrow more for renovations or debt consolidation?
- Am I on a variable rate?
If you answer yes to any of the above, now’s the time to explore remortgage deals.
Exploring your options: Types of remortgage deals
There are several types of remortgage deals to consider, depending on your financial goals:
- Fixed-rate remortgage: Locks your interest rate for a set period (usually 2, 5 or 10 years), giving predictable payments.
- Tracker mortgage: Moves in line with the Bank of England base rate, good when rates are low.
- Offset mortgage: Links your savings to your mortgage, reducing the interest you pay.
Each type has its pros and cons, so it’s worth consulting a financial adviser or using comparison websites to find tailored offers.
Case study: James and Priya – Funding an extension
James and Priya, a couple from Leeds, wanted to extend their kitchen and add value to their home. Instead of taking out a personal loan, they opted for a remortgage deal that let them borrow an additional £30,000 against their increased home equity.
“Not only was the rate better than a personal loan,” James explains, “but our monthly repayment only went up by £110, and we added value to the property.”
By choosing a five-year fixed remortgage deal, they also protected themselves from any near-future interest rate hikes.
Watch out for fees
While remortgage deals can save you money, it’s crucial to consider the fees involved:
- Exit fees or early repayment charges from your current lender
- Arrangement fees for the new mortgage
- Valuation and legal fees, although some lenders offer free services as part of the deal
Always do the maths or consult a broker to ensure the deal makes financial sense after fees are accounted for.
Don’t go it alone: the power of a broker
Mortgage brokers have access to hundreds of remortgage deals, including some not available directly to consumers. They can assess your financial situation and recommend the most suitable lenders.
Many brokers offer free consultations or charge a flat fee. In Sarah’s case, the broker fee of £295 paid for itself in less than two months of savings.
Your mortgage, your future
Choosing the right remortgage deal can offer immediate relief and long-term benefits. Whether it’s reducing monthly payments, financing home improvements, or simply gaining peace of mind with a fixed rate, there’s power in being proactive.
So, take a look at your current deal. Compare offers. Speak to a broker. And remember, remortgage deals aren’t just about numbers. They’re about protecting your future, one smart decision at a time.
Tips for choosing a good mortgage broker
Finding the right broker is just as important as finding the right deal. Here are a few tips to help you choose wisely:
- Check qualifications: Ensure they’re registered with the Financial Conduct Authority (FCA). You can verify this on the FCA register.
- Ask about whole-of-market access: Some brokers only work with a limited panel of lenders, while others can search the entire market for the best remortgage deals.
- Understand the fees: Some brokers charge fixed fees, others work on commission, and some do both. Always get a clear breakdown before committing.
- Look for reviews and recommendations: Personal referrals and online reviews can give insight into a broker’s reputation and success rate.
- Ensure transparency: A good broker should be able to explain all your options clearly and answer your questions without jargon.
Choosing a trustworthy broker can be the difference between an average outcome and an outstanding remortgage deal.
