3 minutes
3 minutes
3 minutes
3 minutes
to read
to read
to read
to read
Wednesday 9 March 2022
Wednesday 9 March 2022
Wednesday 9 March 2022
Wednesday 9 March 2022
According to a survey by Ipsos Mori, 31% of people with a mortgage or renting spend more than a third of their household income on payments. Even if your mortgage payments are below this level, securing a better deal can provide a significant boost to your finances and personal wealth.
Mortgage lenders constantly seek new customers, often offering introductory rates for two to five years. After this period, your mortgage typically moves to the lender's Standard Variable Rate (SVR). At this point, you have three options:
Stay on the SVR.
Re-mortgage with your existing lender.
Re-mortgage with a new lender.
Staying on the Standard Variable Rate
Remaining on the SVR can be the simplest and, in some cases, the cheapest choice. However, it’s essential to weigh the cost of re-mortgaging against the potential savings.
Costs to Consider When Re-Mortgaging:
Valuation Fees: Your home will need to be revalued.
Legal Fees: Paperwork must be processed for the new mortgage.
Exit Fees: Charged by your current lender to close the mortgage.
Early Repayment Charges (ERCs): Compensates the lender if you leave the mortgage early.
While some mortgage deals cover these upfront costs, they may come with higher interest rates. If the cost of re-mortgaging outweighs the savings, staying on the SVR could make sense.
Re-Mortgaging with Your Existing Lender
Thanks to rules introduced in 2014, lenders must ensure you can afford your mortgage. While these rules apply to new borrowers, lenders have some flexibility when offering better deals to existing customers, even if you wouldn’t qualify under stricter criteria.
Re-mortgaging with your current lender is often simpler, as you don’t need to change providers or deal with new legalities.
Re-Mortgaging with a New Lender
Switching to a new lender can be advantageous if:
You’ve built equity in your home over the last 2-5 years.
Your property’s value has risen, resulting in a smaller loan-to-value (LTV).
A lower LTV is akin to putting down a larger deposit, often qualifying you for better rates. Comparing available options can also give you leverage when negotiating with your current lender.
Key Considerations
To determine whether re-mortgaging is worthwhile:
Add Up All Costs: Include fees for valuation, legal work, exit, and repayment charges.
Compare Savings: Look at potential savings from reduced interest rates.
If the savings outweigh the costs, re-mortgaging is likely a smart financial move.
Professional Help
If the process feels overwhelming, a qualified financial advisor can guide you through it. At Barrett Mortgages, we provide trusted advice tailored to your needs, helping you make informed decisions about re-mortgaging and other mortgage options.
Contact Us
📞 01202 733809
📧 enquiries@barrettmortgages.com
📍 Poole, Dorset
Barrett Mortgages offers advice not just for re-mortgaging but also for first-time buyer mortgages, buy-to-let investments, equity release, and more. Founded in 2009 by Darren Barrett, we’ve built a reputation for clear, honest, and personalised service.
Check Our Reviews
See what our clients say about us on our Google Reviews Page.
Make the right choice for your financial future with Barrett Mortgages!
According to a survey by Ipsos Mori, 31% of people with a mortgage or renting spend more than a third of their household income on payments. Even if your mortgage payments are below this level, securing a better deal can provide a significant boost to your finances and personal wealth.
Mortgage lenders constantly seek new customers, often offering introductory rates for two to five years. After this period, your mortgage typically moves to the lender's Standard Variable Rate (SVR). At this point, you have three options:
Stay on the SVR.
Re-mortgage with your existing lender.
Re-mortgage with a new lender.
Staying on the Standard Variable Rate
Remaining on the SVR can be the simplest and, in some cases, the cheapest choice. However, it’s essential to weigh the cost of re-mortgaging against the potential savings.
Costs to Consider When Re-Mortgaging:
Valuation Fees: Your home will need to be revalued.
Legal Fees: Paperwork must be processed for the new mortgage.
Exit Fees: Charged by your current lender to close the mortgage.
Early Repayment Charges (ERCs): Compensates the lender if you leave the mortgage early.
While some mortgage deals cover these upfront costs, they may come with higher interest rates. If the cost of re-mortgaging outweighs the savings, staying on the SVR could make sense.
Re-Mortgaging with Your Existing Lender
Thanks to rules introduced in 2014, lenders must ensure you can afford your mortgage. While these rules apply to new borrowers, lenders have some flexibility when offering better deals to existing customers, even if you wouldn’t qualify under stricter criteria.
Re-mortgaging with your current lender is often simpler, as you don’t need to change providers or deal with new legalities.
Re-Mortgaging with a New Lender
Switching to a new lender can be advantageous if:
You’ve built equity in your home over the last 2-5 years.
Your property’s value has risen, resulting in a smaller loan-to-value (LTV).
A lower LTV is akin to putting down a larger deposit, often qualifying you for better rates. Comparing available options can also give you leverage when negotiating with your current lender.
Key Considerations
To determine whether re-mortgaging is worthwhile:
Add Up All Costs: Include fees for valuation, legal work, exit, and repayment charges.
Compare Savings: Look at potential savings from reduced interest rates.
If the savings outweigh the costs, re-mortgaging is likely a smart financial move.
Professional Help
If the process feels overwhelming, a qualified financial advisor can guide you through it. At Barrett Mortgages, we provide trusted advice tailored to your needs, helping you make informed decisions about re-mortgaging and other mortgage options.
Contact Us
📞 01202 733809
📧 enquiries@barrettmortgages.com
📍 Poole, Dorset
Barrett Mortgages offers advice not just for re-mortgaging but also for first-time buyer mortgages, buy-to-let investments, equity release, and more. Founded in 2009 by Darren Barrett, we’ve built a reputation for clear, honest, and personalised service.
Check Our Reviews
See what our clients say about us on our Google Reviews Page.
Make the right choice for your financial future with Barrett Mortgages!
