Should you remortgage?

Your current deal is about to end.

Many of the best mortgages only last a short time – often two to five years – the typical length of time offered on a fixed rate, tracker or discount mortgage.

When it comes to an end, your lender will put you on its bog standard variable rate (SVR). It’s likely to be higher than your old interest rate and higher than the best buys available. If so, you want to be ready to remortgage to a cheaper rate. Start looking around 14 weeks before your rate ends.

Your home's value has gone up...a lot.

If the value of the property has risen rapidly since you took out your mortgage, you may find you’re in a lower loan-to-value band, and therefore eligible for much lower rates. Again, you need to do your sums but it’s definitely worth a look.

You want to overpay & your lender won't let you.

Perhaps you’ve had a pay rise or maybe you’ve inherited some money. You now want to pay extra but your current deal won’t let you or it will only let you make a small overpayment.

A remortgage will allow you to reduce the loan size and potentially get a cheaper rate as a result. But watch out for any early repayment charges or exit fees you face, and compare this to how much you'd save with the new, lower mortgage.

You want to borrow more.

Perhaps your current lender has said no to lending you extra money or the terms it's offering aren’t very good. Remortgaging to a new lender might enable you to raise money cheaply on low rates. But remember to take all the fees into account to see if it really is cheaper than other forms of borrowing.

The new lender will ask you what the extra money is for. Surprisingly, it is likely to be more comfortable with you borrowing the money for a new car than for business purposes. Not so surprisingly, it won’t want to lend you money to start a new business….

The most commonly acceptable reasons to raise money are for home improvements and paying off other debts. Just be prepared for your lender to ask for evidence if you are borrowing a large amount, e.g. builder quotes, or proof that you have paid off the debts.

You want a more flexible mortgage.

Maybe you want to be able to miss a payment. Changing jobs, going back into education, going travelling – whatever the reason, there are mortgages which will let you take payment holidays.

Or maybe you’ve been tempted by different, whizzy mortgages which combine your savings or current accounts with your mortgage.

Whatever flexibility you want in a mortgage, chances are it’s out there. But remember products don’t offer these twiddly bits for free. Expect to pay for flexible features with a slightly higher interest rate. So don’t be tempted to go for bells and whistles unless you will actually use them.

If it sounds like remortgaging could be the right move for you, you want to start the search 14 weeks before you want to remortgage.