Remortgaging- When is the right time to remortgage?

  • Author: Dean Skinner
  • Posted on: 19th April 2021
  • Posted in: Blog

With banks and building societies now offering mortgages with historically low interest rates, we are seeing a spike in clients considering remortgaging. Here’s a brief guide on why it might be right for you and what we can do to help.

Why remortgage?

Your initial incentive rate is ending

If you are coming to the end of the initial incentive period of your mortgage product (be it fixed, tracker or discount) your lender will soon be moving you onto its “SVR” (standard variable rate) which is very likely to be more expensive than your current rate and any potential offers available to you.

The value of your property has increased

If the value of your property goes up over time and/or you keep up with your monthly payments, your LTV (loan to value) % becomes lower and this may allow you to access more favourable mortgage rates. These can make a huge difference to the interest rate and therefore cash payable.

You want to borrow more money to release equity in your property

Whether you want to borrow more to fund home improvements, gift a house deposit to a child or consolidate other, more expensive loans, borrowing more money against your property is likely to be a comparatively cost effective method of doing so...although it will be secured against your property unlike some other methods.

Changes in circumstances

As careers develop and financial circumstances change you may find yourself able to switch from an Interest Only mortgage to one on a Capital Repayment basis or you may even find yourself able to pay your mortgage off earlier than planned. Both of these options could save you significant amounts of interest.

Time is money!

Due to the sums of money involved, any changes to interest rates can have significant cash implications so it literally pays to instruct a trusted and experienced conveyancer like Crosby Woods: As a quick rule of thumb, you could save between £45 and £60 per month per £100k of mortgage for a 1% change in interest rate. For example, moving a £200k repayment mortgage which is about to move onto an SVR of 4.99% to a new mortgage with a fixed rate of 2% could save around £300 per month in interest!

Deals are time-limited

Once you have an offer in place from a lender you will typically only have between three and six months (depending on the lender) to complete. With a typical remortgage process taking between 4 and 8 weeks this doesn’t leave much time for delays so having an efficient and reliable property expert to manage your conveyancing needs is a must!

Making conveyancing simple

At Crosby & Woods, our team of property solicitors have a wealth of experience and knowledge of the remortgaging process.

We work with equally experienced and respected local property professionals, such as surveyors and independent mortgage brokers, to ensure that our customers have access to the advice they need, all under one roof.

To discuss any related property issue, including obtaining a fully itemised quotation for a sale, purchase, remortgage or lease extension from a Law Society CQS accredited Conveyancing practice, please call 01273 734 600 or email us at advice@crosbywoods.co.uk