The latest research into home loans has shown that last October, around 50,500 homeowners remortgaged their properties, increasing from the previous year by 23%. The UK’s total worth of remortgages is currently at a staggering £9.2 billion, and has become the highest results for this sector in a decade.
This all begs the question, why has the popularity in remortgage loans risen to these heights? And as this is the case, should you be remortgaging your property?
According to this latest study, more homeowners are nearing the end of their introductory period, which runs the risk of being shifted to a much higher SVR (standard variable rate). This in addition to the looming uncertainty of Brexit that has led to homeowners rushing to find cheap remortgaging deals before there are even further changes to the property market.
Whilst this may be a smart tactic for some, remortgaging is entirely dependent upon a homeowner’s unique situation. Therefore, it’s best that you only consider remortgaging your home for the right reasons. Through this piece we will be exploring when and why you should consider remortgaging your home, and if so, when to go about applying for such loans.
Remortgaging your home can help homeowners to save considerable amounts of money; with the latest research by Which? finding that those who did not remortgage after their current deal was up (and thus put on an SVR) could have be forking out a shocking £4,000 more per annum than if they had secured a better mortgage loan.
Some of the main reasons to start considering a remortgage are as follows:
Your current deal is up – many of the best mortgage deals out there are only available for a fixed period of time (such as fixed rate and tracker mortgages). These types of home loans only last an average of 2 to 5 years, and after this deal is up, the mortgage lender will then switch the home owner onto an SVR. This SVR will more often than not come with significantly higher interest rates in comparison to the previous, limited deal.
Want to borrow more money – remortgaging your home can also be a great way to open up some funds for home improvements or to pay off any other existing debts.
You own more of your home – As a homeowner starts to pay back their mortgage, they build up a gradual and increasing amount of equity on this property. When you come to own a significant portion of the property (say around 30% in comparison to the initial deposit-worth of 10%), remortgaging could mean a better rate. It could mean this the LTV (loan-to-value) will be lower as you own more of your home.
A good time to remortgage is totally dependent on you, however, it is most common when you are approaching the end of your introductory period.
With the Brexit cloud casting uncertainty over the mortgage market, it may be wise to consider using comparison sites and brokers like Remortgage Quote Online to see what deals are available. We offer a whole of market comparison, allowing you to enter your details and get a list of competitive quotes in just a few minutes. All quotes provided are completely no obligation and if you wish to proceed, you will be put in touch with one of our specialist advisors who will be able to guide you every step of the way.