Remortgage for a better rate
When you are thinking about remortgaging, one of the most common reasons to do so is the opportunity to obtain a better interest rate on your home loan than is currently on offer from your existing mortgage provider.
Why remortgage for a better rate?
There is one prime reason for remortgaging for many people, and that is, you could have the opportunity to pay a lower rate on interest. The interest you pay each month on your mortgage repayments can add up to a large amount of cash over the years the mortgage is active, and so even a small-seeming difference in interest rate could save you a substantial sum of money in the longer term.
Fixed rat remortgage deals can be an attractive option when first taken out, but once they come to an end you will usually find that your rate of interest moves to the lender’s own standard variable rate (SVR) which may well be less competitive than other rates on the market. If you currently have a fixed rate mortgage deal that is coming to an end, you could find that remortgaging gets you a much better deal as far as interest rates are concerned.
Points to be aware of when considering a remortgage for a better rate
Although remortgaging can be a path to better interest rates, it may not always be the right choice when it comes to the bigger picture, savings-wise. Before you’re tempted by the latest rates, consider whether the saving you make will balance out against expenses such as:
- Exit fees or early repayment fees – leaving your mortgage deal before a certain amount of time has elapsed could incur a charge
- Valuation fees and product fees levied by the new mortgage provider
- Legal fees – bear in mind that a remortgage requires a similar level of preparation to a totally new mortgage, and the relevant legal obligations will need to be fulfilled by a conveyancer