With continuing low interest rates, you may be considering remortgaging to save money.
Even if your mortgage provider has recently reduced its Standard Variable Rate (SVR), moving to a new mortgage deal could save you money. But before you’re tempted by an attractive introductory rate, it’s worth considering the bigger picture.
Should I stay or should I go?
It’s true that moving to a new deal could save you money, just remember to check that you won’t incur an Early repayment Charge (ERC) if you change your mortgage before the end of your current deal. It’s also worth factoring in any potential legal, valuation and administration costs that may be associated with signing up to a new mortgage deal.
Tougher lending rules
Mortgage regulation may also have changed since you took out your current deal. The EU Mortgage Credit Directive of 2015 introduced stricter lending criteria which has led to mortgage lenders having to take greater steps to check affordability – including on remortgages.
You can expect to be asked to show evidence of your income, such as payslips and bank statements, and your outgoings, including other debt repayments, household bills and living costs such as travel, clothing, entertainment and childcare.
Changing the type of deal
When looking at new deals, you may want to consider a different type of mortgage arrangement to your current deal.
For instance, you may decide you would benefit from the option of payment holidays, or a more flexible repayment arrangement.
If you have significant savings, you may want to switch to an offset or current account mortgage, where you use your
savings to reduce the proportion of the loan on which you pay interest.
Are you still covered?
If you’re thinking of changing your mortgage, remember to review your protection arrangements at the same time – especially if you don’t already have cover in place, or your circumstances have changed since you last reviewed your cover.
The value of personal, family, or income protection should not be underestimated if it means keeping the roof over your heads when you need it most.
With so many areas to consider, it makes sense to seek professional mortgage advice. We can help you weigh up the financial benefits of remortgaging, choose the most appropriate deal, handle your mortgage application and ensure your loan is properly protected.