9 Reasons to Remortgage

The mortgage market is very competitive in terms of available interest rates, so by switching mortgage lenders or moving to a better deal, you could significantly reduce your monthly mortgage payments. Switching to a different lender may involve paying an exit fee or an early repayment charge to your current provider. However, any extra charges may be worth it compared to the amount of money you could save by remortgaging to a better rate.

If your existing mortgage is nearing an end, you will need to find another mortgage. The best mortgage deals usually only last for two to five years and come with various incentives such as a tracker, fixed-rate, or discount mortgage. When your time is up, most lenders will automatically put you on its Standard Variable Rate (SVR), a rate that usually has a higher amount of interest and costs more than the other options available. This is a great reason to remortgage at a cheaper rate.

It's common for people's circumstances to change. For example, you may get a better job earning more money and wish to make overpayments on your mortgage, or you may want to switch to an interest-only or offset mortgage to free up capital. This is a great reason to remortgage. It allows you increased flexibility to switch to a mortgage deal that better suits your current financial situation.

If the value of your property has increased over time, it may be worth remortgaging. If this is the case, you may find your home has a more favourable loan-to-value rate, which opens up many more options. Remortgaging to a new deal can ensure you get much lower rates and free up cash to put towards paying off your mortgage, other debts, or perhaps put towards home improvements.

Consolidating debt has become a common reason to remortgage. If you have credit card debt or short-term loans across several different lenders, you can raise money by remortgaging to pay off these debts and be left with just one monthly payment. Remortgaging for debt consolidation will reduce how much interest you pay on your total debt, saving you thousands in the longer term. This can also help you to recuperate any damage to your credit score.

If you’re divorcing or splitting from your partner, remortgaging could raise the money you need to buy out your ex-partner, depending on your ability to afford the mortgage on just your income. Remortgaging for divorce can also help you get a deal with a better rate and lower, more affordable monthly payments.

Remortgaging enables you to borrow more money against your home. If your home's value has increased since you took out your original mortgage, your equity will have increased too, which means you can increase your mortgage amount against this. You can use this extra money for home improvements, funding a new business venture, or putting it towards your children's university education.

One of the top reasons to remortgage your home is to pay off your mortgage sooner, so you'll be mortgage-free. Not many mortgage providers will allow you to overpay on your mortgage, and those that do may charge you to do so. If paying off your mortgage quicker is your goal, then remortgaging to a new deal with low or no overpayment charges is a good solution.

Rising interest rates can increase the overall cost of your mortgage, especially if you are on a tracker mortgage. If you’re worried about rates rising in the future, remortgaging could help you find a lower fixed-rate mortgage.