What is remortgaging
Remortgaging put simply is the process of switching from one mortgage product to another. The primary reason for remortgaging is to save money; this may be directly through lower rates or indirect through selecting a more suitable product to your lifestyle.
Remortgaging hit the headlines in the early 90’s when house prices fell. Mortgage lenders, feeling the bite of a smaller lending income, tried to steal business from one another by offering extremely attractive rates; logic being if each loan is smaller, we need to give out more loans in a bid to make up the shortfall. Mortgage borrowers realised they could save plenty of money by remortgaging and the market became extremely competitive between the lenders. Since then remortgaging has been gaining in popularity and will continue to do so while it offers mortgage borrowers savings.
In the world of mortgages, loyalty is not rewarded, you will not achieve better rates due to having been with the mortgage lender for a long time.
When remortgaging you should shop around, like you would with any other purchase, to ensure you are getting the best deal. In most instances we recommend you instruct an independent mortgage broker to assist you, they can sift through the products to find the best offers for you.
Remortgaging is not a complicated process and contrary to popular opinion it does not have to be a lengthy and costly procedure. We recommend that anyone with a mortgage put a reminder in their diary 3 months before the end of their mortgage fixed rate period, this way you can get the wagon rolling before you revert to the lenders SVR.