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Remortgaging is the process of switching your existing mortgage for a new one, using the same property as security. This can be done with the same mortgage company as the first arrangement, or with a new one.

There are two main reasons why you as a homeowner may choose to remortgage.

You may want a better deal. This could take several different forms – you may want to get a new fixed rate mortgage as your current one is coming to an end, or simply get a better interest rate. Either option will bring down your monthly repayments, helping you to save a little more money each month. A better deal for you may also mean one in which you are able to over-pay each month, enabling you to pay off your mortgage more quickly and save money in the long run. Some mortgages do not allow this, or penalise early repayment, so you may choose to remortgage in order to take advantage of this option.

Alternatively, homeowners may want to access a sum of money for a variety of reasons. By remortgaging you can release cash from your property which may allow you to begin a project which you otherwise could not, for example building an extension or placing a deposit on an investment property.

Whether you plan to purchase a new investment property or simply extend and improve an existing one, remortgaging offers a wealth of opportunities to increase the rental yield of your portfolio.

Remortgaging is particularly popular at the moment. Interest rates are low, which means that homeowners who are negotiating new mortgages are likely to get good deals – on similar or better terms than their current mortgages. Mark Carney, the Governor of the Bank of England, has been considering raising the base rate of interest recently so many homeowners are rushing to remortgage before it gets more expensive to do so in the future.

In addition, the current economic climate has meant that many lenders are unwilling to offer regular loans, as they are uncertain that their borrowers will be able to pay them back, and are further disincentivised by low interest rates. Consequently, for many homeowners, remortgaging offers the only way to access funds for large projects such as extending, redecorating or investing.

This winter, Thorgills will be hosting a mortgage review day in our branches, at which you can speak to qualified advisors about which type of mortgage would best suit you and your plans for your property. To find out more about this event and to confirm your attendance, contact our team today.