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When is it a good idea to remortgage?


In the face of possible economic uncertainty, the current high in remortgage applications shows no signs of slowing. Some homeowners, concerned that 2019 might see unpredictable rises in the Bank of England’s base rate, are moving quickly to lock themselves into remortgage deals while interest rates remain at historic lows. But when is it a good time to look at remortgaging?


What is remortgaging?


Simply put, remortgaging is taking out a new mortgage on your home to replace an existing mortgage. Remortgaging can be beneficial if you are currently on a lender’s standard variable rate (SVR), or a fixed or discounted variable rate deal that is about to end. This gives you the opportunity to take advantage of a new mortgage with better features, the security of fixed repayments or to take advantage of lower interest rates than you may currently be on.


Why remortgage now?


The main factor encouraging many to consider remortgaging at present is the potential for a significant rate increase in the future. Currently the Bank of England base rate is low, if this starts to increase then the expectation will be for mortgages rates to follow suit.  Another good reason to remortgage is when your mortgage deal is coming to an end. At this point you will be placed onto the lender's Standard Variable Rate (SVR). This is usually significantly higher than the initial rate of the mortgage. 





When remortgaging might be a good idea


Motivation to remortgaging has already reached an 11-year high, with borrowers who are wary of potential economic uncertainty in 2019 looking to lock themselves into the protection of the low interest rates currently being offered by lenders. With the potential economic uncertainty foremost in people’s minds, it is anticipated that the popularity of fixed rate remortgage products looks set to continue well into 2019.


Moving onto a new deal early?


This rush to remortgage is not only attracting customers who are coming to the end of their current deal, but also those whose current fixed rate term comes to an end in a year’s time or more. Some mortgage holders are beginning to investigate the benefits of applying for low-rate offers now in order to ‘lock-in’ on favourable rates – even if this means paying a penalty now for early repayment – gambling that they will save more in the long-term by protecting themselves from unexpected hikes in mortgage lenders interest rates over the next two years.


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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE 

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