You Could Save £4,500 per Year by Mortgage Switching from a Standard Variable Rate Mortgage

It’s no secret that the type of mortgage you have for your home will always impact the price you have to pay. People often work hard to secure the cheapest possible mortgage available to them when they buy their home, searching high and low for the loan that will get them the best deal for years to come.

The mortgage market will always change over time, though, and this means that a great deal a few years ago might not be the best option anymore.

Remortgaging: How Much Could You Save?

Looking at the option of remortgaging your home can be a good way to overcome this issue. According to online mortgage broker Trussle, thanks to issues like inflation and interest rate changes, the average mortgage holder in the UK could save as much as £4,500 per year by switching away from their standard variable rate mortgage, illustrating just how powerful a remortgage can be when you are trying to save money.

When to Remortgage

Choosing when to remortgage is a crucial part of this process, as your current situation will always impact the options you have. We’ve outlined some of the most crucial areas below to make sure that you know what you need to consider as you decide whether or not remortgaging is the best option for you.

Financial Status

Mortgage providers will only check your eligibility for their service when you first apply for it. This means that you can easily slip out of the bracket of affordability over time, making it harder to apply for a remortgage later down the line. For example, if your credit rating goes down once you take on your mortgage, you may not have access to the preferential rates that were available when you first applied.

Your Existing Mortgage Matters

Mortgage providers are businesses, and this means that they need to make money from the services they provide. If your mortgage is currently below £25,000, it’s unlikely that a provider would be able to make a good enough return to justify offering you a remortgage.

Switching to a different mortgage isn’t always about finding the lowest rate. You may be able to make your mortgage shorter, reducing the number of interest payments you have to make, and there are loads of small changes to the fine print that can make it worth looking for a new provider. Each lender has its own rules when it comes to the services they provide, giving you the chance to change the terms of your agreement when you remortgage.

Your Fixed Rate Has Come to an End

Fixed-rate mortgages are great, but the low rate that you get at the start of your agreement will rarely last. Most loans like this will switch to become a variable rate after a predefined period, and this means that you could end up paying a much higher rate than you had when you first started.

Remortgaging can reset this with a new fixed-rate mortgage or a more secure variable-rate one.

How to Remortgage

It’s not uncommon for people to feel daunted at the prospect of looking for a new mortgage, especially if it was hard when you first looked for this sort of service. Research will always be an essential part of this process, as there are always loads of different types of mortgage on the market and it can be impossible to use information from the past to determine the best route for you in the present.

Getting some help with this process can make it much easier, and a broker is a great place to start with something like this. Not only will a broker already have an intimate knowledge of the mortgage market, but they will also be able to help you to make the greatest savings, with the experience making it much easier for them to make informed decisions.

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Why Remortgage

Using a broker will make the process of remortgaging your home much easier, but you may still be unsure if this path is the right one for you. There are a lot of compelling reasons to look for a new mortgage and we’ve outlined some of these below to give you a better insight into the market.

Because your Home has Increased in Value

The amount of money you can get from a mortgage will always be based on the value of the home you are trying to buy. This means that banks and other lenders will often be able to offer larger loans if your home goes up in value, making it worth looking at the option of remortgaging to make sure that you’re getting as much as you can.

Gives You More Flexibility

The financial world is always changing, and the loan you got in the past may not be as good as those available on the modern market. Remortgaging gives you the flexibility to choose the best mortgage for you at the time, rather than leaving you to live with one that you picked a long time ago.

To ‘Release’ Funds

Remortgaging your home can give you the chance to release the funds that you’ve put into it. This can be very valuable when you need to make a large purchase, with many people going down this route when they want to make home improvements but can’t afford to save for it.

Choosing to go for a remortgage can be a good way to improve your financial situation, giving you the chance to renegotiate the terms of your loan, while also providing you with the best rates available at the time. It may make sense to to use a broker when you’re going through this process, ensuring that you have the support you need to make the right decisions along the way.

Interested? Mortgage Switch with trufe today.

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The Financial Conduct Authority does not regulate commercial lending, secured or unsecured loans and some forms of Buy to Lets. Equity release includes Lifetime Mortgages and Home Reversion Schemes. We can advise and arrange Lifetime Mortgages and will refer to an approved specialist for Home Reversion schemes.

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