Remortgaging is a great way to release equity in your home. It involves taking out a new mortgage, at a higher loan-to-value ratio, on the same property and using that money to pay off your existing mortgage balance. By doing so, you can free up cash to use for various purposes such as home improvements, debt consolidation, education fees and more.

Mortgage rates have increased significantly throughout 2022 but there are always options available to you when it comes to remortgaging your property. Here at LTC Mortgages we will review your current mortgage deal with your current lender and we will advise if moving to a new mortgage provider is the best option for you.

If your mortgage deal has come to an end and you haven’t contacted a mortgage broker or your existing lender then you will automatically be put on the lender's standard variable rate once your fixed term has ended. You will receive a letter urging you to get in contact with the mortgage provider to switch to a better deal. If you can switch to a new deal then you should do so as soon as you can.

Remortgaging may help you save money on your monthly repayments as we will research the best mortgage deals compared to your initial deal. You can typically start looking for a new deal 6 months before your current deal ends however it is always best to wait until your current mortgage deal ends before starting your new remortgage as there may be early repayment charges on your outstanding loan amount.

If the rates on product transfers are better than any remortgage deal you have available to you then we will let you know as it could be cheaper for you to stay with the current lender that your existing deal is with. We will assess your financial situation before we conduct any searches on remortgage deals.

When considering whether or not to remortgage your property, you should bear in mind that the new interest rates may be different from your current mortgage and could affect the amount of money you can release.

Additionally, if you have built up equity in your home over time, then there may be an early repayment charge associated with the existing mortgage deal which could reduce the amount of money you can release. It is therefore important to speak to an experienced financial advisor or independent mortgage broker who can help you make a fully informed decision.

What is equity?

The section of your home that you own outright is the equity that is held in your property, this also includes the amount of deposit you originally put down when buying the house. The higher the deposit you use the more equity you will have, especially if the value of your house increases.

Equity release and releasing equity for extra funds are very different. Borrowing additional funds for extra money can be done at any age whereas equity release can only be done after the age of 55 and the amount borrowed is paid back when the homeowner goes into long term care or passes away.

Mortgage payments

When remortgaging to release extra money, it's also important to consider what type of mortgage best suits your needs and budget. A fixed-rate mortgage, for example, can provide you with peace of mind knowing that your repayments will remain the same over a period of time – although this could mean that you miss out on any potential drops in interest rates.

Alternatively, a variable rate mortgage may offer more flexibility but also carries an element of risk as your interest rate could increase at any time which means your monthly payments will follow the fluctuations of the interest rate.

What can I release equity for when remortgaging?

If you are looking to remortgage to borrow additional funds there are many reasons why you may want to do this, such as:

• Debt consolidation
• Home improvements on the property
• To fund a wedding
• To purchase a car
• Use the money for a deposit on a new property

There are more reasons why you would be accepted by a new lender to request additional borrowing.

Remortgaging to release equity can be a great way to unlock the value of your home, providing you with access to funds for whatever purpose you may need.

However, it is essential to ensure that you get the right advice so that you understand the associated risks and make an informed decision about whether this is the best option for you.

LTC Mortgages can advise you throughout the process when looking to remortgage and raise money in 2023, contact our mortgage advisers today on 0151 662 0188 or email us at [email protected]