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Take The Stress Out Of Remortgaging: Compare With SpotDif

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Remortgaging, the process of switching your existing mortgage to a new deal, can be a strategic move for homeowners. Whether it's to secure a better interest rate, consolidate debts, or release equity, understanding the intricacies of remortgaging can help you make informed decisions.

With so many lenders on the market, it’s important to look at all your options — and that’s where SpotDif comes in. We’ll compare quotes from mortgage lenders and companies across the UK so you can find the best deal for you. 

Start your search with SpotDif or read on for all you need to know about the remortgaging process. 

What is remortgaging?

Remortgaging is a financial process that involves replacing your existing mortgage with a new one. Often (but not always), your new mortgage is from a different lender. It's a common strategy homeowners use to adapt to the changing housing market and make the most of the best interest rates or free up some funds. 

When your current mortgage deal is about to end, it's a smart time to consider remortgaging. Don't want to be hit with a higher standard variable rate? You're not alone. Many homeowners explore remortgaging to lock in lower interest rates, which can mean smaller monthly payments and more money in your pocket.

But that's not all — if your home's value has gone up since you bought it, remortgaging can be like tapping into your property's piggy bank. You can release some of that extra value as cash for home improvements, paying off debts, or other financial goals.

However, it's not a one-size-fits-all solution. Costs, benefits, and market conditions should all be weighed carefully. So, if you're thinking about giving your mortgage a fresh look, chatting with a financial advisor or mortgage expert is a wise move to make the right choice for your situation.

Why consider remortgaging?

Several reasons might prompt you to consider remortgaging.

Better interest rates

Perhaps the most common reason, switching to a mortgage with a more favourable interest rate can result in significant savings over the term of the loan.

Fixed rate expiry

Many homeowners initially opt for fixed-rate mortgages which offer a set interest rate for a few years. Once this period ends, they might be automatically transferred to their lender's standard variable rate (SVR), which can be higher.

Home value increase

If the value of your home has increased significantly, you might find yourself in a lower loan-to-value (LTV) bracket, potentially giving you access to better rates.

Debt consolidation

If you have multiple debts, consolidating them into your mortgage can simplify finances, although this often means spreading the repayment over a longer period.

Releasing equity

You might want to release equity from your home for various reasons, from home improvements to investing elsewhere.

Understanding the costs of remortgaging

While remortgaging can offer financial benefits, it's crucial to be aware of potential costs you may come across.

Early repayment charges

Your current mortgage might have penalties for overpayments or for exiting before the term ends.

Exit fees

Even if you aren't charged for repaying early, there might be an exit fee when you leave your current lender.

Arrangement fees

Your new mortgage deal might come with its own set of fees.

Valuation and legal fees

Remortgaging usually requires your home to be revalued, and there might be legal fees involved in the switch.

How does remortgaging work?

Remortgaging is akin to the process you went through when you got your first mortgage, albeit often more streamlined.

Researching quotes

Start by researching the deals available in the market. Compare these with your current mortgage terms to see if making a switch is beneficial.

Applying for the new mortgage

Once you've found a deal that suits your needs, you'll need to go through an application process. This will involve credit checks and an assessment of your financial situation.

Arranging a property valuation

The new lender will typically want to value your property, even if you're not releasing equity. This ensures the amount you're borrowing aligns with the property's value.

The legal work

There will be some legal work involved to transfer the mortgage deed. Some lenders offer free legal services as part of their remortgage deals, or you can choose to use your own solicitor.

Completing on the deal

Once all checks are done, and the paperwork is in order, your new mortgage will be in place. The new lender will pay off your old mortgage, and your repayments will be adjusted according to the new terms.

Things to consider when choosing a new mortgage

In many cases, remortgaging is a straightforward process. However, there are a few key aspects to consider to make sure you’re not left out of pocket.

Future rate changes

If you're switching to get a better rate, think about potential future interest rate changes, especially if you're considering a variable-rate mortgage.

Overall cost

A lower monthly payment might seem attractive, but consider the overall cost. Spreading your mortgage over a longer term might mean lower monthly payments, but the total amount paid could be higher.

Changing circumstances

If you expect changes in your financial situation or anticipate moving homes soon, factor these into your decision.

Find the right remortgaging deal with SpotDif

Remortgaging can be a savvy financial move, but it's not one-size-fits-all. It requires a clear understanding of your current mortgage, a vision of your financial future, and a keen eye on the housing market and broader economic landscape. Armed with this knowledge, homeowners can leverage remortgaging as a tool to enhance their financial health and meet evolving needs.

Whether you’re releasing equity or looking for a lower monthly repayment rate, it’s essential to find the right remortgaging deal for your needs and circumstances. 

Search lenders and deals with SpotDif — we’ll do the hard work for you and provide you with a comparison of quotes near you. 

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Tansy Dando
Senior Content Manager
I'm always curious to understand and unpick the latest trends for all things wealth and business.
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