Most fixed rate deals run for two to five years. When yours ends, your lender will write to you with a new one. Accepting that offer is easy. It is rarely the cheapest option on the market. Sound remortgaging advice shows you what else you could be paying before you commit.
At Ritchie & McLean Mortgage Solutions, we work with homeowners in Downpatrick and across County Down. This guide explains how remortgaging works, what the process involves, and when an adviser is worth the money.
How does remortgaging work?
So how does remortgaging work? Remortgaging is when you move the mortgage on your existing property from one lender to another. Your new mortgage then replaces your old one.
Do your research
There are many mortgage deals on the market, and shopping around helps you find the right one. Start with your current lender. Ask what rates they can offer you, and if you can switch to a new rate with them. After that, look at what other lenders are offering and compare. Remortgaging advice is available to help you decide if now is the right time.
Consider the costs of remortgaging
Moving your mortgage to a new lender can bring costs with it. Take the time to work out if the move makes financial sense. Calculate your new monthly repayments, then weigh the benefits against what switching could cost you.
Those costs can include:
- Booking or completion fees charged by a new lender
- Conveyancing costs
- Property valuation costs
- Early repayment charges, sometimes called ERCs, or exit fees charged by your current lender
When is the right time to remortgage?
The best time to remortgage is when switching would save you money or suit your circumstances better. That might mean lower monthly payments, or less interest paid overall. It might also mean borrowing more for an important life event or investment.
Several situations point towards a switch:
- Your fixed rate deal is coming to an end
- You are worried about rising interest rates and want to secure a better one
- Rates today are lower than when you took out your original mortgage
- You want to overpay and your current lender will not let you
- You have built up a good amount of equity in your home
- You want to buy someone else out of a jointly owned property
What is the process for remortgaging a property in the UK?
The steps stay much the same across the UK.
- Check your current deal. Note the end date, the balance owed, and any early repayment charge.
- Review your finances. Lenders will look at your income, your spending and your credit file again.
- Compare the market. Use tools such as a remortgage calculator to give you a rough idea of new monthly payments.
- Get advice and apply. Apply formally to the lender through your adviser.
- Wait for the remortgage valuation. The lender checks if the property is worth enough to support the loan.
- Let the solicitor do the legal work. They pay off the old loan and register the new lender.
- Completion. Your new deal starts and your first payment date is set.
Most remortgages complete in four to eight weeks. Start looking about six months before your current rate ends. Many lenders let you reserve a deal that far in advance, which protects you if rates rise.
Remortgaging in Northern Ireland
Remortgaging in Northern Ireland follows the same lending rules as the rest of the UK. The legal side is different. Conveyancing here has its own process, so you will need a solicitor who practises locally.
Property values also sit lower here than in much of England. That affects your loan to value, which is the size of your loan compared with the value of your home. Prices in Downpatrick and the wider County Down area have moved over the past few years. If your home is worth more than when you bought it, your loan to value may have dropped into a better band. Lower bands usually come with lower rates, so it pays to check.
You can see our full range of mortgage services online.
How difficult is remortgaging?
Remortgaging is simpler than buying a home. There is no chain, no estate agent and no seller to wait on. You already own the property, so much of the hard work is behind you.
A few things that still catch people out:
- Their income has changed from the last application
- Self-employed applicants may need two or three years of accounts or tax calculations
- Their credit score has taken a hit
- The property has been altered without the right approvals
- An early repayment charge makes switching too costly for now
Affordability rules are stricter than they used to be. Passing the check once does not mean you will pass the next one. Sound mortgage advice saves time here, because an adviser spots problems before a lender turns you down.
Can you remortgage if your circumstances have changed?
You can usually remortgage after a change in circumstances, though your options depend on what has changed. In the UK, a remortgage is treated as a new mortgage application. Lenders assess your affordability, your income and overall risks as things stand today, rather than as they were when you first applied.
A change in circumstances covers anything affecting your income, outgoings, employment or household since your last application. That includes:
- A new job or change of career
- Lower income or higher outgoings
- Becoming self employed
- Having children
- Divorce or separation
- Retirement, or nearing retirement age
- Taking on more credit commitments
Becoming self-employed
Remortgaging after going self-employed is common. Lenders will want evidence of your income, usually through accounts of tax calculations. Some accept one year of trading, while others prefer two or more. Stable or rising income improves your options.
Divorce or separation
Divorce is a common reason for remortgaging. It may mean removing one person from the mortgage, buying out a share of the property, or restructuring the loan. Affordability is then judged on the remaining borrower’s income alone. That can be difficult, but it is far from impossible. A longer term or a different lender sometimes makes it work.
Approaching retirement
If age or retirement plans change, lenders will look closely at how the mortgage gets repaid in later years. Some are more flexible than others. A clear pension income or a low loan to value helps your case.
Higher debts or commitments
Loans, credit cards or car finance all reduce how much you can borrow, as lenders count them in their affordability calculations. Even so, many homeowners still remortgage to secure a better rate, or to avoid moving onto their lender’s standard variable rate.
Is it worth getting a mortgage advisor to remortgage?
Going direct to your bank limits you to one lender’s range. An adviser looks across the market, including deals that are only sold through intermediaries.
The rate is not the only thing worth checking ,A good advisor will also:
- Work out the true costs of each deal once fees are added
- Tell you when staying with your current lender is the better move
- Handle the paperwork and chase the lender for you
- Review your protection cover, since borrowing more changes what your family would need
Good remortgaging advice usually pays for itself through a better rate.
Getting remortgaging advice in Downpatrick
Our Downpatrick office means you can sit down with an adviser face to face. Some clients prefer a phone appointment, and we are happy to work that way too. We also have offices in Ballynahinch, Banbridge and Carryduff.
This is how we usually work:
- We look at your current deal, your balance and your end date
- We check what you can borrow now, based on your income and outgoings
- We compare deals from across our panel of lenders
- We handle the application and keep you updated until completion
You can learn more about Ritchie & McLean Mortgage Solutions and the way we work with clients.
Speak to us about your remortgage
If your rate ends within the next six months, now is a good time to talk. A short conversation will tell you what your options look like and what you could save.
Get in touch with our Downpatrick team or call us on 028 4483 5485 and we will take it from there.
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