Updated: Nov 23
The recent hike in interest rates has left many homeowners worrying about their mortgage renewal and whether they will be able to keep up with their mortgage payments on a higher interest rate. With the rising cost of living coupled with interest rates currently at a 15 year high, it is more important than ever to start planning your remortgage early to ensure that you get the best deal possible.
Preparation is Key
One of the biggest benefits of planning your remortgage early is that you can book a deal up to six months in advance. This gives you plenty of time to shop around and find the best possible deal for your individual circumstances. A reputable mortgage broker should be your first port of call, as they can search the whole market for the most suitable deal whilst also comparing with products being offered by your current lender.
Reserve a Fixed Rate Now & Review Later
Another benefit of planning your remortgage early is that it gives you the opportunity to secure a fixed rate deal. This has proven to be particularly helpful during a period where lenders are putting up their rates.
Fixed rate deals are a popular choice for many homeowners as they provide certainty about the amount you will need to pay each month, which can be particularly helpful if you are on a tight budget.
By planning your remortgage early, you also have the flexibility to change your mind if a better option materialises between now and when your current deal is up. A mortgage broker will be checking back in regularly to make sure you secure the best available deal. They will also help you compare fixed rates with tracker / discounted variable rates, with these options generally being more suited if you require some degree of flexibility with your mortgage.
But isn’t it Easier to Stick with my Current Lender?
While it may seem convenient to stick with your current lender, the truth is that this may not be the best option for you. And with the right guidance remortgaging can be a simple and straightforward process. With the assistance of a reliable mortgage broker, you will be made aware of better deals before your remortgage takes place – a service that most banks will not provide, particularly if you have booked a deal directly with them – they will leave it to you to monitor rates!
Considering the importance of your mortgage, it is worth taking the time to explore all your options. Opting for a deal with your current lender could end up being a costly decision. So, it is best to engage with a mortgage broker as early as possible to explore the wider market.
Good Opportunity To Review The Bigger Picture
During your remortgage review it is also the perfect time to consider any changes you may want to make. Here are a few key things to consider as part of your remortgage:
1) Lowering your monthly repayments: If it is possible based on your desired retirement age (?), one option is to extend the term of your mortgage. Just keep in mind that this will increase the overall cost of your mortgage.
2) Future plans to move: If you anticipate moving within the next few years, think carefully before committing to a 5-year fixed rate. While most mortgages are portable, there is no guarantee that your lender will support you in moving your mortgage. For example, you may require more mortgage than they are willing to offer you.
3) Borrowing additional funds: Are you planning any home improvements? Maybe you want to consolidate some debts or assist a family member? By raising funds as part of your remortgage, you not only have one interest rate for the full amount, but you also have a single future end date. Remortgaging now and borrowing additional funds later would create two separate parts to your mortgage and each with differing end dates, which can prove challenging in the future.
How long does a remortgage take?
It is important to note that the remortgage process will generally take around 6 to 8 weeks to complete. It is therefore not advisable to leave things to the last minute as you may end up on your lender's higher standard variable rate, resulting in paying more than you should. Remember, starting early simply gives you the best of both worlds – you protect yourself from any further rate increases whilst always maintaining complete flexibility to switch to a better deal.
In conclusion, planning your remortgage early can provide many benefits, including giving you plenty of time to find the best possible deal for your individual needs, securing a fixed rate for added certainty, and with the flexibility to change your mind if a better offer becomes available. A reputable mortgage broker will be able to guide you through the process and ensure that you get the best deal possible. So don't delay, start planning your remortgage today and take control of your finances.
You may have to pay an early repayment charge to your existing lender if you remortgage.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.