Remortgaging involves transferring your mortgage from one lender to another, often considered at the end of the mortgage term or to release equity for purposes like home improvements.

Reasons to Remortgage:

1. Obtain a more affordable mortgage deal, reducing monthly repayments.

2. Release funds for home improvements or as an alternative to taking out a loan.

3. Extend the term of your current mortgage to lower monthly payments.

4. Shorten the mortgage term if a better deal is found.

While remortgaging in the current financial climate may pose challenges, it’s still feasible. Lenders typically require a deposit of 15-20% for a remortgage, with a higher deposit increasing the likelihood of securing a competitive rate.

Financial Considerations:

This decision should not be impulsive. Begin assessing your financial situation a few months before the mortgage term ends. If you have a tracker mortgage, analyze your repayments and bank statements over the past year to determine what you can afford. Evaluate the following bank charges:

– Exit fee: Covers the costs of releasing deeds and Land Registry charges.

– Early redemption charge (ERC): Common in fixed, capped, discounted, or cashback mortgages, this charge may make remortgaging expensive.

– Standard Variable Rate (SVR): The standard interest rate charged by mortgage providers. If on a tracker mortgage, you might be automatically transferred to your lender’s SVR after the deal expires. Remortgaging may be preferable, as SVR is typically higher than normal mortgage deals. Check your agreement, as you might be obligated to pay the lender’s SVR for a set time after the mortgage deal expires.

The amount requested by your bank should match the amount specified in your original mortgage agreement.