Do you feel that you're overpaying for your mortgage? Perhaps you've seen a cheaper mortgage rate elsewhere, or, perhaps, your personal financial circumstances have changed and it would really help if your mortgage repayments were smaller.
Remortgaging can be beneficial, but it can also be costly. The general advice is to always think about remortgaging when your current fixed-term deal is about to end. However, there are exceptions, and it can be a good idea to remortgage even if you still are in the middle of a fixed term. We've spoken to Paul Stringer, Director of the Norton Finance Group; here's his advice for those considering remortgaging.
1. Know what you want from a new mortgage
Paul's primary advice is to be absolutely clear why you want to remortgage; is it because you are currently on a standard variable rate, and it's too high? Or is it because you need additional funds for a home improvement project?
'There are plenty of remortgage products on the market, from flexible mortgages that could allow for over payments, to capped mortgages. Having a good understanding about the reason you are remortgaging will help you decide if it’s the best option and help you decide which remortgage product is right for you.'
2. Work out the cost of remortgaging
It's not necessarily always a bad idea to remortgage mid-contract, even with the fees involved – but you have to be certain those fees won't make too much of a dent in your finances at this point in time"
'Termination of an agreement will likely lead to fees; this is known as an early repayment charge. This is where you must pay your old lender for the costs they incur as a result of redeeming early. Timing is everything, remortgaging might save you money in the long run but consider if you are able to afford to do it now. Some lenders might also charge admin fees for any changes to a contract.'
3. Assess your current financial situation
If you want to remortgage because your financial circumstances have worsened, the unfortunate truth is that it's most likely a bad idea: 'If your current financial circumstance has worsened you likely won’t receive a better deal', says Paul. However, there may be other circumstances that can make a better mortgage deal possible – namely, if your house has gone up in value.
4. Speak to your current lender first
'Sticking with your current lender but choosing a different deal might end up being the best option. It might help you avoid paying fees linked with switching to another provider’s mortgage.' Your lender will be more up-to-date on your finances, too, so if you had a mortgage payment holiday, for instance, they'll be much less explaining to do than if you were to switch lenders.
5. Compare mortgage deals
'If your deal is coming to an end shopping around for a new deal is a way to avoid being put on a Standard Variable Rate, which could be higher than your current deal. Take the time to compare what is out there. Be mindful that getting a new deal will take time so plan ahead.'
We've teamed up with online mortgage expert Habito: use their free comparison tool below to see what deals are available to you.