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Are you stuck paying over the odds for a fixed-rate mortgage? Or perhaps you’d like to refinance your property as you near the end of your mortgage? Switching mortgages could be the right option for you. Let’s take a look at some good and bad reasons to remortgage your home and see what options are available to you. Mortgages are very often the largest and most significant financial commitment of a person’s life. They involve incredible sums of money and can take decades to pay off. As such, they are subject to the woes of interest rates, economies, and other forces. Tweaking them from time to time - or replacing them entirely with a remortgage - is no bad thing. After all, there is never a need to pointlessly throw money away when a little bit of work could make a big saving. If you’re the sort of person who uses comparison websites for flights, takeaways, or cars, there is no reason not to engage in the same practice when it comes to financing your home. While there are a host of both pros and cons when it comes to remortgaging, the main reason for pursuing a remortgage is to save money. However, executed incorrectly, a remortgage can actually end up more expensive than your existing deal. Some of the best reasons for choosing to remortgage your house include the looming end of your current mortgage deal; looking for a better rate; wanting to pay more and not being allowed, and increased value of your current property. Poor reasons, which need avoiding or very, very, careful consideration are having a small debt to pay; a change in personal finance circumstances, or having very little equity. Done well, though, and a remortgage deal could save homeowners hundreds of pounds each month. With 34% of household expenditure evaporating on mortgage repayments, taking the plunge and switching mortgages is vital in the event that you are paying over the odds for your current deal. For example, a mortgage with £60,000 left to pay with a 4% rate will mean total interest payments of £6,300 over the next five years. Switch that to a 3% rate and total interest payments drop down to £4,680, resulting in a reduction of £1,620 overall. Even with an admin fee - say for £500 - this still results in a big saving of £1,120, meaning the overall amount saved is still more than double the cost incurred by the fee to switch. Remortgaging offers a good option to get out of unfavourable deals, especially on very long term mortgages. For example, lenders, such as banks, are currently offering historically low rates on 10-year fixed deals. While formerly unpopular with borrowers they have increased in favour due to current levels of economic uncertainty. According to industry analysts, remortgaging has jumped in popularity across the country as homeowners chase the best deals they can get. In particularly expensive or popular spots, where loans are higher, the trend is at its most popular. In London, remortgaging has peaked at an eight year high. As well as saving money, in extreme circumstances, remortgaging a house is a great way to free up cheaper capital to pay for emergencies as they flare up. When homeowners release equity from their house by taking up a new mortgage, it gives them access to money that they can borrow cheaply. Of course, current affairs should play an important role in any long term, large, financial decision. While the jury is still out on the overall impact of Brexit, home owners looking to remortgage should take into consideration the immediate and long term economic forecast for the United Kingdom. Incredibly low rates caused by feelings of doom and gloom, however, mean that the hundreds of pounds some owners could save in remortgaging might even evolve into thousands of pounds, representing massive savings for those who take the plunge. As with any large financial commitment, proper research is a must before making any serious undertakings. There are risks, but also great rewards available in the process. Track your mortgage online with MortgageWatcher.com
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