Deciding whether to remortgage now or wait is a question many homeowners are asking, especially in today’s fluctuating financial climate. If the timing is right, remortgaging can offer you the opportunity to secure a better deal, reduce your monthly payments, or free up some equity in your home. However, the right decision depends on various factors, from market conditions to your personal financial situation.
In this guide, we’ll explore the key aspects to consider when deciding whether to remortgage now or hold off.
1. What’s Your Current Mortgage Rate?
A good starting point is to look at your current mortgage rate. If you’re on a fixed-rate deal, find out when it’s due to expire. Many homeowners remortgage once their fixed-rate term ends to avoid moving onto their lender’s standard variable rate (SVR), which is often higher.
- If your fixed rate is due to end soon, it might be worth remortgaging now to lock in a more favourable deal.
- If your fixed rate still has a few years left, you may want to weigh the cost of early repayment charges against the potential savings from switching.
2. How Are Interest Rates Looking?
Interest rates have a significant impact on your mortgage repayments, so understanding current and future trends is important.
- If rates are low and there’s speculation they might rise, remortgaging now to secure a low fixed rate could save you money in the long run.
- If rates are expected to drop, it might be wise to wait before remortgaging, as you could benefit from a better deal in the future.
Keeping an eye on the Bank of England’s base rate and economic forecasts can give you insights into where mortgage rates might be headed.
3. Do You Want to Release Equity?
Remortgaging can allow you to release equity from your property, giving you access to a lump sum of money. This could be useful if you’re planning major home renovations, consolidating debt, or investing in other areas.
- If you need funds soon, remortgaging now could provide you with the cash you need.
- If you’re not in a rush, waiting might allow your property value to increase further, which could mean more equity to release when you do remortgage.
4. What Are the Fees Involved?
Remortgaging isn’t free, so it’s essential to factor in any associated fees before making your decision. These could include:
- Early repayment charges: If you’re still in a fixed-rate period, your lender may charge a fee for leaving early.
- Arrangement fees: Some new mortgage deals come with setup fees that can add to the overall cost.
- Valuation and legal fees: While some remortgages offer free valuations and legal work, not all do.
Make sure you calculate whether the savings from a new deal will outweigh these costs.
5. How’s Your Credit Score?
Your credit score plays a key role in the mortgage deals you’re likely to be offered. If your score has improved since you took out your current mortgage, you may be eligible for more competitive rates.
- If your credit score is strong, remortgaging now could help you access better deals.
- If your credit score has taken a hit, it may be worth waiting until you’ve improved your credit profile to secure a more favorable mortgage rate.
Review your credit report to see if there are any issues you can address before remortgaging.
6. Are You Planning to Move Soon?
If you’re thinking about moving in the near future, you might want to reconsider remortgaging. Many fixed-rate deals come with early repayment charges, so if you sell your home before the fixed period ends, you could face additional costs.
- If you’re staying put for the long term, locking in a low-rate remortgage deal now could be beneficial.
- If you’re planning to move, it might be worth waiting or looking for a more flexible mortgage option, such as a tracker or variable rate, that doesn’t have high exit fees.
7. Seek Expert Advice
The decision to remortgage can be complex, and market conditions can change rapidly. That’s why it’s always a good idea to speak to a mortgage broker. They can help you:
- Assess your financial situation: A broker can review your current mortgage, income, and future goals to determine whether remortgaging makes sense for you.
- Find the best deal: Brokers have access to a wide range of mortgage products, including exclusive deals that may not be available directly to consumers.
- Guide you through the process: From handling paperwork to dealing with lenders, a mortgage broker can make the remortgaging process easier and less stressful.
Conclusion: Should You Remortgage Now or Wait?
There’s no one-size-fits-all answer to this question. The right time to remortgage depends on your personal financial situation, the terms of your current mortgage, and the state of the market.
- If your fixed rate is ending soon and interest rates are expected to rise, remortgaging now might save you money.
- If interest rates are predicted to fall or you’re planning to move, it could be worth waiting a little longer.
The best way to make an informed decision is to speak with a qualified mortgage broker who can help you navigate the options and find the deal that’s right for you.
You can find the UK’s best-rated mortgage brokers in our Mortgage Broker Directory.
