REMORTGAGE

The term 'remortgage' simply means switching a current mortgage deal and/or a mortgage lender.

Remortgages are extremely popular, and there is good reason for this. Why it is worth to remortgage?

  1. The UK’s remortgage market is highly competitive and by switching your mortgage you can considerably improve your financial status;
  2. Once you have established your position in the UK you can get better deal and more suitable conditions;
  3. It will enable you to fit your mortgage to your current requirements, in order to get the best possible deal;
  4. If required you can consolidate your other liabilities (debts);
  5. If you are looking to invest in a second property or buy a holiday home - you can release some of the equity you have build up in your house and use the capital.

Are you positive that your current mortgage is the best deal that today's mortgage market can offer you? Remember it is very competitive field and mortgage providers are subsequently eager to gain fresh mortgage business. Secondly, people's personal and financial circumstances change over time, therefore what might have been an ideal mortgage a few years ago, might not be the most suitable mortgage for their current needs.

Below you will find a list of the most commonly offered types of remortgages:

Equity release mortgage

An equity release mortgage will typically pay off your current mortgage and equally provide additional capital. Moreover it is good to remember that it is often cheaper to raise money with a remortgage than taking out a personal loan.

Debt consolidation mortgages

It might be a suitable solution for those who feel the pressure of debts and would like to take out a remortgage large enough to cover both the mortgage and additional debts. It simplifies personal finances by delivering a single monthly mortgage repayment.

Fixed Rate Remortgages
Fixed Rate Remortgages are exactly what the name suggests – the remortgage interest rate is fixed for a defined period of time. Therefore no matter what happens to the base rate or the lender’s standard variable rate during that period, the remortgage rate you pay will remain at the same level for this fixed period.

Discounted Rate Remortgages
A Discounted Rate Remortgage offers a discount on the lender’s Standard Variable Rate (SVR). The discount might be set at 2% or 3% below the SVR applicable for a certain length of time. E.g., if the lender’s SVR was 6% and you were offered a 2% discount, you would be charged a rate of 4% interest on your loan. If your SVR increased to 8%, then your remortgage rate would go up to 6%, and so on.

Bad Credit Remortgages
For those who have been refused a mortgaqe elsewhere due to defaults arrears, bankruptcy etc. It makes sense to seek the advise of a specialist who will scour the remortgage market on your behalf for the best bad credit remortgage deal for your personal needs.

Tracker Remortgages
A Tracker Remortgage has a rate of interest set slightly above the Base Rate, but usually just below the lender’s Standard Variable Rate (SVR). As the Base Rate is increased or decreased, the tracker rate remortgage moves accordingly and the monthly payments will go up and down, even if the lender does not change their SVR.

Capped Rate Remortgages
A Capped Rate Remortgage works in a similar way to a Fixed Rate Remortgage. The rate of interest charged is linked to the Standard Variable Rate (SVR), but a maximum interest rate - ‘cap’ is set. If the SVR increases, so do your monthly repayments but only up to the rate set by the cap. Even if the SVR increases above the capped rate, your remortgage repayments will not go any higher.

Capped and Collared Rate Remortgages
A capped and collared rate remortgage is very similar to a standard capped rate remortgage. The only difference is that the interest rate applied to the debt is also collared, meaning the rate payable will not fall below a set level nor rise above the cap. The time frame for the collar and cap can varry.

Flexible Repayment Remortgages
Flexible Remortgages enable to make remortgage over-payments and underpayments and sometimes even take a break from making any remortgage repayments at all. Some products also allow to treat them a bit like a bank account, meaning that e.g. your salary can be paid into your ‘account’ and giving you the option to draw down additional cash (similarly as overdraft facility) if you need it.


Phone for independent mortgage advice – 0845 855 9900

 

 

 

 

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