A remortgage means to take out a new mortgage on a property you already own and is done to either replace your existing mortgage, or to borrow money against your property.

Remortgaging is a very common thing to do and it can prove extremely worthwhile if you do it at the right time and in the right way.

If you do your homework, remortgaging can save you a huge amount of money on your monthly payments, simply by shopping around for the best deals as you would for your energy or communications bills. It can also help release equity when you need it most.

Below, we look at some of the scenarios where remortgaging may well be a smart move:

Your current mortgage deal is coming to an end

A lot of the best mortgages last around two to five years on fixed rate, tracker or discount deals. When this period comes to an end, the lender will place you on its standard variable rate (SVR), which is likely to be higher than your old deal and just as likely to be higher than others available on the market. Just as you would start looking for cheaper car insurance when your incumbent insurer bumps up the renewal, start looking for a cheaper remortgage deal at about 3 months before your current rate comes to an end.

The value of your property has gone up

Perhaps you have had work done which has dramatically increased the value of your property, or its simply in a desirable area where prices are on the rise. Whatever the reason, if the value of your property has risen rapidly since you took out your mortgage, you may find you’re in a lower loan-to-value band, and therefore eligible for much lower rates.

You’re worried about interest rates

The Bank of England’s current rate is extremely low, but it’s certainly always a worry that the rates will rise, bumping up your mortgage payments, so its beneficial to be looking around for remortgage deals. Don’t, however, presume the worst if you look at the new rates being offered by your current lender, as if it’s the rates that new customers are being offered, it doesn’t automatically mean yours will be affected.

You want to borrow more money

It may well be that your current lender has said no to lending you extra money or the terms it is offering aren’t very good. This is where it pays to shop around, as remortgaging to a new lender may enable borrowing cheaply on low rates. Be prepared to be asked what the money is for and, if it’s large amount for building works for example, they may ask to evidence of quotes from suppliers.

You want a more flexible deal

While fixed rate mortgages work provide certainty; a flexible mortgage enables you some movement. It may be you wish to take a payment holiday, you’ve left your job to retrain or you’re off to travel the world! (lucky you!)

But you must expect these flexible features to come with a slightly higher interest rate, so ask yourself first; ‘do I really need them?’.

To enquire about Alexander Grace Law’s conveyancing services for your remortgage, please contact Kerry Gudgeon at quotes@alexandergrace-law.co.uk