Reasons To Remortgage

There are many reasons why you may wish to remortgage - from finding a better deal and saving money to a change in circumstances. Read on for some of the main reasons why somebody may remortgage their home.

There’s A Better Deal Out There

Many people will remortgage their home if they find a better deal out there, to release equity. If you are looking for a better mortgage deal, speak to your mortgage advisor and discuss your options - at LTC Mortgages, we can find the best remortgage deal for you. 

We can help you weigh up your options, and come to a decision as to whether it’s worth remortgaging or not considering the additional charges and exit fees.

Personal Circumstances Have Changed

Another reason for remortgaging is if your personal circumstances change. For example, if you break up with your partner or go through a divorce. Likewise, if somebody you co-signed a mortgage with dies, you may opt to remortgage. 

If you can’t afford to keep up the mortgage alone, you may consider remortgaging to get the funds to buy the other person out, if this situation occurs. 

However, be sure to consider the costs that may be associated with repaying the current mortgage and applying for a new mortgage.

Your Current Term is Ending

 Arguably, the main reason that people decide to remortgage their property is that their existing mortgage term is coming to an end. 

Most mortgages have an initial deal, whether it be fixed, variable, tracker, or more. The initial mortgage term usually lasts between two and five years - and if you don’t remortgage when this is coming to an end, you’ll have to settle for the lender’s SVR - standard variable rate.

The lender’s SVR is often higher than the competition, so you’ll end up paying more than if you remortgaged with a different lender.

If your mortgage deal is coming to an end, our mortgage experts at LTC Mortgages can help find the best deals for you. We recommend that you begin looking for a new deal at least three months before your deal ends to give you time to find the best deal.

What Does Fixed Rate Mean?

First of all, let’s discuss what a mortgage involves. At its simplest, a mortgage is a loan that you can use to fund the proceeds of a property. 

It’s an agreement between you and a lender. The mortgage lender will have the right to possess your property if you fail to repay the money you owe alongside interest. 

A fixed-rate mortgage is typically offered for a period of either two years, three years, or five years. However, you can find mortgage deals that span for longer periods. 

Fixed-rate mortgages are attractive as they offer lower rates than the lender’s SVR - however, with fixed-rate mortgages, it’s important to note that you are bound to the contract until the loan period expires. 

However, anything could change in the fixed term - so if you’re looking to remortgage during the fixed-rate mortgage period, read on to learn more.

Remortgaging During a Fixed Term

In short, yes - it’s entirely possible to remortgage during a fixed term. However, you may be charged to do so, as most lenders will have early repayment charges in place (also known as ERCs), as well as exit fees. 

Legally, there is nothing stopping you from getting out of the mortgage term before it ends. However, it’s important to assess whether it’s worth remortgaging. Factor in the money you’ll save alongside the money you’ll be charged for leaving, and consider whether it’s worth it. 

At LTC Mortgages, we always recommend you speak with a mortgage advisor before remortgaging. Chat with our team of mortgage brokers today to discuss your options, get support through the process, and find the best mortgage rates and deals for you and your circumstances.