28th June 2021
5 reasons to review your mortgage
Remortgaging is the process of getting a new mortgage on an existing property. You don’t always need to wait until your current deal has come to an end to remortgage – although you should check your current terms. Now may be a good time to review your mortgage and see what other products are on the market that might save you money.
Here are five reasons to review your current mortgage deal:
- Current deal has come to an end
You should start the remortgage process 3-6 months before your current mortgage is due to end. If you’re on a fixed rate and it expires, you’ll automatically revert to their standard variable rates (SVR), which could work out more expensive than what you are currently paying.
Starting early will give you time to shop around, compare and rework any finances.
- Saving money
Don’t feel you have to loyally stick to your current lender, now is a great time to shop around for the most competitive deal. The Bank of England base rate is currently unusually low, which means borrowing money now enables you to take advantage of lower-than- normal mortgage rates.
- Property prices are rising
Before you can start to look at rates, you need to get an accurate valuation on what your property is worth. The value of your property is likely to have risen since you first took out your mortgage, so the amount you need to borrow will be smaller percentage of the market value of your home. In other words, your loan-to-value-ratio will be lower.
- To borrow more money
Your finances may have changed of late which may mean that you have to borrow more money. Remortgaging for home improvements or for debt consolidation are two of the more common reasons that people release the equity in their homes. Needless to say, borrowing more means your monthly payments will increase so you will need to pass affordability checks before doing so.
- To pay off your mortgage quicker
When you remortgage, you may want to opt for a shorter term with higher monthly repayments. It’s important however to ensure that the monthly repayments are always affordable for you.
If you would like advice on remortgaging, our mortgage consultant, Ross Paterson from Sphere Financial Services Ltd is able to provide expert and tailored advice.
Your home may be repossessed if you do not keep up to date with mortgage payments.