As the Bank of England has recently increased interest rates, a growing number of borrowers are considering remortgaging to a deal with a lower interest rate. If you currently have a mortgage that is on the lender’s Standard Variable Rate, you may be able to remortgage to a fixed rate deal, or a capped, tracker or discount mortgage.
Prior to applying for a new mortgage, check that you will not have to pay an early repayment charge, as the cost of this would counteract any savings from the new product. Although people typically remortgage to a new deal to save money, it is also possible to move deals for the security of having a fixed payment, like with a fixed rate deal.
The process can take up to eight weeks, depending on any complications that occur during the process. Mortgage advisors are able to help avoid problems during the application process, as they gain much of their knowledge during CeMAP training courses. Although you have a current mortgage, you are not guaranteed to be approved for a remortgage, especially if your circumstances have changed. The lender will still carry out credit and affordability checks before making a decision.
One of the main reasons for remortgaging is to transfer to a better deal with a lower interest rate. You may be able to secure a fixed, discount, or tracker deal that offers a favourable interest rate, but if you have been in your home for a while, you may also have more equity in it, which often attracts a lower interest rate. Speaking to a mortgage advisor will help you decide.
