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 you remortgage early? There may be reasons why you shouldn’t remortgage early. For one thing, you may have to pay an early repayment charge (ERC) if you decide to remortgage before your current deal has ended. 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. Get in touch if you would like to know more and benefit from the FEE-FREE advice that we can give you.
Can I Remortgage Early?
So, you have taken out a mortgage and bought a property. But 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. But the question is this: When is the best time to leave your present mortgage deal and o to a new lender?
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 redemption charge can usually be avoided as their mortgage will end just before their new remortgage deal begins.
But what if you want to remortgage much earlier than this? It is possible for you to do so, but as we said, you will be subject to the early repayment charges set by your current lender. You, therefore, need to be sure you will save money by remortgaging. These apply to both homeowners and buy-to-let property owners.
Can I remortgage before 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 until after 6 months have passed from the date you first took out your mortgage.
In some cases, your mortgage 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 you 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.
However, if you do see a better-fixed rate elsewhere or if you learn of a better deal after consulting with a mortgage broker, then it’s a good idea to remortgage to the best mortgage deal if you can afford to do so.
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 make a few 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 ERC 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?
The ERC is just the start! If you decide to remortgage to a new lender, there are other 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 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 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 advice on whether or not you should remortgage before your current deal 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. You may be on the lender’s standard variable rate? Our remortgage specialists can give you advice on the best variable and fixed-rate mortgages that are on the market and can help you 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.