Remortgaging can help you to reduce your payments or to improve your borrowing terms. You can also use it to release some equity in your property, in other words to take some money out of your home to use it for something else such as school fees or home improvements.
You might also want to remortgage in order to get a more flexible deal which will allow you to overpay, for instance, or to choose an offset or current account mortgage where any savings you have with the same bank or building society can be set against your loan, reducing your interest payments.
You can also remortgage to consolidate other loans such as credit card debts and personal loans. A mortgage can offer a better interest rate here but don’t forget that the longer you take to pay off these loans, the more you’ll pay overall in interest.
Thanks to their extensive knowledge of the market our experts at Knight Frank Finance can guide you towards the remortgage deal that’s best for you but in the meanwhile there are some points that you should consider when thinking about remortgaging your property.
Check the value of your property. Has it increased? The better the loan to value (LTV), in other words, the proportion of the money you’re looking to borrow compared to the value of your home, the better the deal you’ll probably be able to get. Some lenders will make a quick, cursory calculation but at Knight Frank Finance we can ensure that your home is accurately valued.
There is almost always a fee for remortgaging and so it’s important to make sure that if you managed to find a lower rate you still don’t end up being worse off because of fees for switching your mortgage. Don’t forget to review your mortgage at least once a year – put a note in your diary. Most lenders will start offering you a low, introductory rate for the first few years before transferring you to their standard variable rate. The end of this initial, attractive rate is a good time to think about remortgaging and looking for a better deal elsewhere.
Read our remortgaging guide for more information on the types of mortgages available to you.
For more information please contact: