If you’re unhappy with your current mortgage deal, perhaps because you have spotted a lower rate of interest elsewhere, then you might decide to remortgage. You could save thousands of pounds when you move to a new fixed-rate deal, be that with your current lender or another lender on the mortgage market.
Can I remortgage early? Yes, you can remortgage early however there are a few things you need to take into consideration first. Before you choose to remortgage early, you should consider if it makes financial sense. The main thing to be cautious of if you decide to remortgage before your current deal has ended is that you may have to pay an early repayment charge (ERC). Lenders will often charge you between 1% to 5% of your current mortgage debt although the fee they charge could also be higher.
Our team at YesCanDo Money are remortgage experts and we can advise you on your best course of action. At present we are experiencing our customers finding it hard to make a decision on whether a 2 or 5 year fixed mortgage rate period is best for them!
Get in touch if you would like to know more and benefit from the sound FEE-FREE advice that we can give you.
Can I Remortgage Early?
When you moved into a new home or perhaps you recently remortgaged but now questioning whether it might be wise to pay off the fixed rate mortgage early and pay the early repayment charges on your current mortgage deal. If you later decide another fixed-rate deal could be better for your needs, you might consider remortgaging and leaving your fixed-rate mortgage early and getting a new mortgage deal. But the question is this: When is the best time to leave your present mortgage deal and go to a new lender? Before you take any action talk to one of our experienced mortgage advisers who will give you sound financial advice and help you make the right decision.
Most people decide to remortgage 3-4 months before their current fixed rate deal ends. As it can take several weeks to organize 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? It is 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.
Can I remortgage before the end of fixed term?
Some mortgage lenders are very flexible and will let you remortgage at any time.
However, some mortgage lenders can be stricter than this and they may not let you remortgage with them until after 6 months have passed from the date you first took out your mortgage.
In some cases, your current lender will want to know why you want to remortgage early, especially if you want to leave your current deal within the initial 6-month window. If you can’t convince them of your need to remortgage, you may have to wait before they let you make the switch.
To find out more, speak to your existing mortgage Provider. Ask them about their remortgaging rules and then find out how much you will need to pay if you do decide to start the mortgage process early.
For further advice, speak to a mortgage broker. Should you decide to use our services, you will benefit from expert remortgage specialists who won’t charge you a fee for any of their support.
Why Remortgage Early?
There are lots of reasons why you might decide to leave your mortgage before the end of your fixed rate. For example:
Taking advantage of lower interest rates and a great fixed rate mortgage deal
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.
You will need to factor in the early repayment charge before coming to a decision as your finances will be affected in the short term.
However, if you can afford to pay the lender’s fees and you think you will be better off financially after remortgaging, then making the switch could be a good idea but make sure you get advice from a mortgage broker first!
You want to move house
Most lenders will let you transfer your mortgage to a new property so you don’t always need to remortgage. This is called porting. Your mortgage lender will allow you to take your existing mortgage and interest rates with you and this will stop you from needing to pay early repayment charges.
There has been a change in your personal circumstances
You might need to break your mortgage contract if you have to sell your house earlier than expected, perhaps if your employer asks you to relocate to a new city, for example.
If your finances have taken a hit, you might want to remortgage to consolidate debt or to reduce the mortgage repayments by getting a new mortgage deal.
And if your family suddenly grows in size, you might need to raise money for home improvements as a consequence. For this reason, remortgaging to release equity is a good idea.
These are some of the reasons to remortgage before the end of your fixed-rate term. Other changes within your personal circumstances could give you the incentive to consider the option.
You are on the lender’s standard variable rate
If you are on the mortgage lender’s standard variable rate (SVR) 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 quickly 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 charge (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.
Do you have to pay early repayment charges with your existing lender?
If you decide to remortgage with the same lender, the ERC may be waived. This is something to consider when you’re shopping around although it might still be in your better interests to move to a different lender if you can find a cheaper fixed-rate mortgage deal.
Should you remortgage with the same lender?
Other fees
Early repayment charges can just be the start! If you decide to remortgage to a new lender, there are other remortgage costs involved. These include the exit fees that your current lender will charge. Then there are the fees that your new mortgage lender will subject you to, including the valuation fees and the arrangement fee.
It’s important to take all of these fees into account before you remortgage as it might be more cost-effective for you to remain with the same lender on the same deal before it expires.
The added stress
If you choose to switch to a different lender, you will have to deal with a lot of paperwork. This will include the application form as well as the paperwork that is needed to prove your affordability. For some people, this can be very stressful. As we mentioned, you will also incur various fees, so there is the potential for financial stress too.
To make life easier for yourself, you might decide to stay with the same lender, even if it means you will be financially worse off in the long term.
However, if are keen to remortgage, perhaps because you are tied into an expensive mortgage over a fixed-rate period, then you shouldn’t forego your opportunity to switch deals. 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.
How YesCanDo Money Can Help
If you want to leave your mortgage before the end of your fixed term, whether it’s to reduce the repayments on your mortgage or for any other reason, then we are here to help.
Our fee-free mortgage advisors can:
- Give you expert advice on whether or not you should remortgage before your current fixed rate mortgage term ends.
- Point you towards the fixed-rate mortgage deals that are better than your current mortgage.
- Use an online calculator to let you know what your ERC may be.
- Give you advice on how to reduce the loan amount on your next mortgage.
- Help you with the paperwork that is needed for your new mortgage.
- Liaise with your new and existing lender.
Do all of this for you for FREE, as there are no broker fees attached to any of our services.
Get In Touch With Our Mortgage Broker Team
If you want to leave your mortgage early and move on to a new deal elsewhere, get in touch with our team. It may be that you’re paying more than you need to on the lender’s standard variable rate. Whatever your situation, our professional remortgage specialists can give you advice on the best variable and fixed-rate mortgages that are on the market. Our expert team will help you get the best mortgage deal and make the 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 cheaper mortgage rate today.
