If you’re unhappy with your current mortgage deal, perhaps because you’ve spotted a lower interest rate elsewhere, you might consider remortgaging. By moving to a new fixed-rate deal, either with your current lender or another lender on the mortgage market, you could potentially save thousands of pounds. But the question we focus on in this guide below is can you remortgage early?
How Early Can You Remortgage? Is it Possible to Remortgage Early?
Yes, you can remortgage early; however, there are a few factors to consider before making this decision. It’s essential to determine whether remortgaging early makes financial sense. The main concern when deciding to remortgage before your current deal ends is the potential early repayment charge (ERC).
When to start the remortgage process? Most people decide to remortgage 3-4 months before their existing deal ends. As it can take several weeks to organise a new mortgage, the early repayment charge can usually be avoided as the mortgage will end just before their new fixed-rate remortgage deal begins.
But what if you are thinking of remortgaging early? Is it possible for you to do so? The answer is it is possible to remortgage early; however, our advice is to get the facts right.
At YesCanDo, we will calculate your early repayment charges and make sure that remortgaging to a new interest rate is beneficial to you. These apply to both homeowners and buy-to-let property owners. Our experienced remortgage experts can advise you on your best course of action. Get in touch if you’d like to know more and benefit from the sound, FEE-FREE advice we can provide.
How Soon Can You Remortgage? Factors to Consider
- Timing: Most people decide to remortgage 3-4 months before their current fixed-rate deal ends. As it can take several weeks to organise a new mortgage, the early repayment charge can usually be avoided when the new fixed-rate remortgage deal begins just before the current mortgage ends.
- Early Repayment Charges: Before you remortgage early, be sure to tally up your early repayment charges to make certain that shifting to another rate of interest is worth it. This applies to both homeowners and buy-to-let customers alike. Banks often demand between 1% and 5% of your current mortgage debt, though the penalty can be higher than this range in some cases. Don’t let steep fees stand in the way of potentially saving you money; crunch the numbers first before taking any steps!
- Lender’s Flexibility: Mortgage lenders can vary in flexibility; some may allow you to remortgage anytime, while others might require a waiting period of at least six months from when you first received your mortgage. Be sure to consult with your current mortgage lender about their specific remortgaging rules and fees that come along with the process if it isn’t completed within the designated timeframe.
Remortgage Before the End of the Fixed Term
While some mortgage lenders are quite accommodating and let you remortgage at any time, others may be more stringent. These companies might not allow for a new loan until six months have elapsed since the moment of your original mortgage agreement.
If you must switch your current mortgage deal within the initial 6-month period, then it is possible that your lender may require an explanation of why. Despite this, if you can convincingly persuade them as to why remortgaging now is necessary for you, they will likely allow the transfer without any delay.
To discover more, converse with your current mortgage supplier. Inquire about their remortgaging terms and then calculate the amount you will need to put down if you determine to initiate the loan process ahead of schedule.
For additional insight, consult a mortgage broker. If you decide to enlist our services, not only will you receive expert remortgage specialists at no cost but also benefit from their guidance and support.
For more read our guide on How soon can you remortgage before your fixed rate ends?
Why Remortgage Early? Common Reasons
Before we dive into the advantages and disadvantages of remortgaging early, it’s essential to understand the common reasons why people choose to remortgage before their fixed-rate term ends. Circumstances can change, and being proactive in seeking a better mortgage deal can potentially save you money and provide financial flexibility in the long run.
Advantages of Remortgaging Early
With many potential benefits, it can be a smart decision to consider remortgaging early. Here are just some of the advantages:
Taking advantage of lower interest rates and a great fixed-rate mortgage deals
If you are struggling with your monthly payments or if you simply want to save money, then it might make sense to switch to a mortgage with a lower fixed rate or interest rate.
Moving house
If you’re looking to upgrade your home or have a change of scenery, one of the best options is mortgage porting. This process lets you take advantage of your current lender’s interest rates and transfer that mortgage balance over to a new property – without the hassle or expense from early repayment charges! Most lenders will be willing to offer this service, so it pays off for both parties in numerous ways.
Change in personal circumstances
If you find yourself needing to sell your home earlier than expected due to a job relocation, for instance, you may need to terminate your mortgage contract. Furthermore, if money is tight and debts are piling up then look into remortgaging as this can bring down repayments by getting a new mortgage deal. On the other hand, if family size suddenly increases and requires more space or renovations in general- accessing equity through remortgaging might be worth considering. Ultimately it’s an excellent solution when circumstances arise that require extra funds.
Your properties value has increased
Interest rates are based on the loan-to-value of your property. If you have carried out work on your property it may be that the loan to value may have decreased significantly. Having a repayment mortgage will also mean you will have paid off some of the mortgage debt. Al this may lead to the fact that your existing mortgage deal may no longer be the best! Talk to us and we will compare mortgage deals and also take into consideration the costs involved to make sure you are on or get the very best remortgage deal.
Being on the lender’s standard variable rate (SVR)
If you are on the mortgage lender’s standard variable rate, there is a strong chance that you could make substantial savings by remortgaging to a fixed-rate mortgage deal. Get advice quickly, as interest rates are rising rapidly at the moment.
Drawbacks of Remortgaging Early
In some cases, remortgaging early can be a good idea. However, there are drawbacks to doing so.
The early repayment charges (ERC):
How much you have to pay will depend on the type of mortgage you are on. If you are on a variable-rate mortgage, you will usually have to pay 3 months interest if you decide to remortgage early. If you are on a fixed-rate mortgage, the charge will be calculated as a percentage of what you still need to pay. Typically, the early repayment charge will be smaller the further into your fixed-rate mortgage you are.
Other fees
Early repayment fees are only the beginning when it comes to remortgaging! You’ll have other charges associated with switching lenders, such as exit fees from your existing lender and valuation and arrangement fees applied by your new mortgage provider. It’s essential to consider all these costs before you decide to switch, as sometimes it might be more affordable for you in the long run if you remain on the same deal with your existing mortgage lender until it expires.
The added stress
Deciding to switch to a different lender entails wading through lots of paperwork, including the application itself and documents that prove your fiscal standing. This process can be incredibly stressful for many people; not to mention all the fees associated which could put you in an undesirable financial predicament.
To make life easier for yourself, you might decide to stay with the same lender. However, we highly recommend exploring all your options and taking the route that makes the most financial sense to your situation. At YesCanDo Money, our experienced team of mortgage brokers will manage all of your application paperwork for you and will give you all the support you need when trying to prove your affordability. As such, we can ensure a hassle and stress-free experience if you decide to use our services.
Conclusion: Ending your mortgage deal early
Remortgaging early can be both advantageous and disadvantageous, depending on your unique circumstances. The key is to carefully evaluate your options, consider the costs and benefits, and seek professional advice to make an informed decision. At YesCanDo Money, our experienced mortgage brokers will provide you with personalised, fee-free guidance to help you determine whether remortgaging early is the best option for you.
Ultimately, if you’re considering remortgaging ahead of schedule, it is essential to analyse all the pros and cons. On one hand, there may be potential benefits such as securing a lower interest rate, accommodating altered individual situations, or circumventing your lender’s standard variable rate svr. However, on the flip side, there are also negatives including an early repayment fee along with extra charges and the overwhelming stress linked to undergoing this type of transaction.
To make the optimal decision, it’s a wise choice to speak with a mortgage consultant who can help you understand the potential benefits and drawbacks of remortgaging sooner. The YesCanDo Money team is here to provide comprehensive, tailored guidance and support every step along the way – so your experience is stress-free.
Reach out to us today and receive specialised, free advice tailored specifically for you when it comes to remortgaging opportunities. We’re here to help you make the most informed decision, whether you’re considering remortgaging early or simply exploring your options for the future.
Case Study: Tom and Sarah's Successful Early Remortgage
By remortgaging early, Tom and Sarah reduced their monthly mortgage repayments and secured the necessary funds for their home improvement projects. The couple now enjoys their updated home with their growing family.
Can I remortgage early? 6 Ways YesCanDo Money Can Help
Our fee-free mortgage advisors can provide the following services to assist you in the remortgaging process:
- Offer expert advice on whether or not you should remortgage before your current fixed-rate mortgage term ends.
- Identify fixed-rate mortgage deals that may be more advantageous than your current mortgage.
- Utilise an online calculator to estimate your ERC.
- Provide guidance on reducing the loan amount for your next mortgage.
- Assist you with the necessary paperwork for your new mortgage.
- Communicate with both your new and existing lenders on your behalf.
Remember, all these services are provided for FREE, as we do not charge broker fees.
Get In Touch With Our Mortgage Broker Team
If you’re considering leaving your current deal early and moving on to a new deal, contact our team. Perhaps you’re paying more than necessary on the lender’s standard variable rate, or you’re facing a different situation. Regardless, our professional remortgage specialists can advise you on the best variable and fixed-rate mortgages available on the market. Our expert team will help you secure the best mortgage deal and ensure a smooth transition from your existing mortgage to a new one.
Get in touch using the contact details on our website and start your journey towards a more affordable mortgage rate today.
FAQs
What's the earliest you can remortgage?
The earliest you can remortgage depends on your lender and the terms of your mortgage agreement. Generally, there is no specific time limit; however, some lenders may impose a minimum period, typically around six months, before allowing you to remortgage. It's essential to review your mortgage contract and consult your lender to understand any restrictions or penalties associated with remortgaging early.
Can I remortgage early without penalty?
Remortgaging early without penalty is possible, but it depends on the terms of your mortgage contract. Some lenders offer mortgage products without early repayment charges (ERCs), allowing you to remortgage without incurring penalties. However, most mortgage deals include ERCs, so it's crucial to carefully assess your contract and weigh the potential costs against the benefits of remortgaging early.
How early can I start looking to remortgage?
You can start looking to remortgage at any time, but it's generally advisable to begin the process around 3-4 months before your current fixed-rate deal ends. This allows ample time for researching available mortgage products, seeking professional advice, and completing the necessary paperwork. Starting early also helps ensure a smooth transition from your current mortgage to a new one, potentially avoiding any lapses in coverage.
Do you have to wait 6 months to remortgage?
While some lenders may impose a six-month waiting period before allowing you to remortgage, others may be more flexible. It's essential to review your mortgage contract and consult your lender to understand any specific restrictions. If your lender requires a six-month waiting period, you may still explore other options or consult a mortgage broker for guidance on the best course of action.
How long do you need to own a house before remortgaging it?
There is no definitive timeframe for how long you need to own a house before remortgaging it. The decision to remortgage ultimately depends on your unique circumstances, financial goals, and the terms of your mortgage agreement. Some lenders may have minimum waiting periods, while others may not impose any restrictions. If you're considering remortgaging, consult your lender and seek professional advice from a mortgage broker to ensure you make an informed decision.
