Remortgage at the Right Time: Get Better Rates Now

Many homeowners face rising mortgage rates that strain their budgets. Timing a remortgage can lead to significant savings, making it easier to manage monthly payments and invest in other priorities.

Timing Your Remortgage for Maximum Savings

Timing is everything when it comes to remortgaging. Mortgage rates fluctuate with changes in the economy and government policies, so staying informed about the best time to remortgage is crucial. Locking in a lower rate at the right time can save you hundreds each month and potentially thousands over the life of your mortgage.

Experts recommend that homeowners start looking at remortgaging options six months before their current mortgage term ends. This way, you have plenty of time to research, compare rates, and access better deals without feeling pressured. Furthermore, you’ll ensure that the switch happens smoothly when your current deal expires, avoiding any risk of being placed on your lender's Standard Variable Rate (SVR), which is often much higher.

Interest Rate Predictions and Economic Conditions

The broader economy plays a big role in the mortgage landscape. Interest rate changes are typically dictated by decisions from the Bank of England, which adjusts the base rate in response to inflation, unemployment figures, and overall economic health.

So how do you keep track of current trends?

1. Watch for government announcements: Keep an eye on interest rate updates from the Bank of England, which can signal when rates may rise or fall.
2. Follow mortgage market reports: These reports provide insights into rate predictions several months in advance, helping you catch that ideal time to remortgage.

Exit Fees and Early Repayment Charges: What to Watch For

It’s important to understand the costs associated with remortgaging before diving in. Some current mortgage agreements impose exit fees or Early Repayment Charges (ERCs). These fees are typically applied if you exit your fixed-term deal before it naturally ends.

• Exit fees: These are standard charges to close your current mortgage, and vary depending on your lender.
• Early Repayment Charges (ERCs): If you're still locked into a fixed-term deal, leaving early can trigger these penalties. Carefully calculate whether the long-term savings from a new, lower interest rate would outweigh the cost of these fees.

Remember that not every lender applies these fees, so it's worth digging into your contract’s fine print or consulting with a mortgage advisor to clarify your options.

Other Factors to Consider Before Remortgaging

Before diving headfirst into the remortgaging process, take a moment to consider your broader financial goals and circumstances.

Your Credit Score Matters

Your credit score is a key factor in determining the mortgage rates lenders will offer you. A higher score opens the door to better remortgage deals. If your credit score is less-than-stellar, you may want to take steps to boost it before exploring remortgage options.

• Review your credit report: Make sure there are no outstanding errors or unpaid loans.
• Stay on top of bills: Pay off credit card debts or loans to improve your score.

For help on improving your credit, you can explore strategies in our post "Improve Your Credit Score: Tips for Quick Enhancement" [link: https://www.wealthfare.co.uk/post/improve-your-credit-score-tips-for-quick-enhancement].

Changes to Your Financial Situation

As your finances change, your mortgage options may also shift. Maybe you've landed a new job, increased your income, or paid off other debts. These factors could make it easier for you to qualify for better remortgage deals. On the other hand, an unstable financial situation may suggest that waiting to remortgage might be more beneficial. Avoid making big commitments if there’s uncertainty around your employment or income in the near future.

Benefits of Locking In Lower Interest Rates

One of the biggest advantages of remortgaging is securing a lower interest rate than you currently have, which lowers your monthly payments. With more cash freed up, you could choose to:

• Build an emergency fund
• Pay down other high-interest debts
• Save for long-term goals, such as your children’s education or your retirement

If you haven’t started building an emergency fund, now could be a good time. Learn more on how to do this in our helpful guide “Build an Emergency Fund: Why and How” [link: https://www.wealthfare.co.uk/post/build-an-emergency-fund-why-and-how].

The Application Process: What to Expect

Once you’ve done your due diligence, are confident that remortgaging is the right move, and have gathered all your documentation, it’s time to start the official application process.

Here’s what you can expect:

1. Contact Lenders: Reach out to banks and building societies, or work with brokers who can compare deals on your behalf.
2. Submit Your Application: Gather your necessary documentation (income statements, proof of identity, current mortgage information, etc.), and ensure your forms are completed accurately.
3. Valuation of Your Property: While some lenders will conduct a drive-by appraisal, others may send an appraiser inside to assess