Mortgage Renewal
Specialising in pairing people with their perfect mortgage
Are You Coming To The End of Your Current Mortgage?
If you’ve been a homeowner for a few years now, it might be wise to start thinking about your next move as your current mortgage deal comes to an end as you’ll need to start thinking about remortgaging to a new one.
It can feel like an inconvenience trying to arrange your mortgage renewal, however, there is good news. Mortgage rates are at their lowest ever levels and by switching to a better deal, you could see your monthly payments decreasing significantly, especially if you’ve built up equity in your home.
So if your mortgage renewal is due, then this is for you. We can advise you on how to go about it and direct you to what deal you should go for.
When Should You Apply for a New Mortgage?
Ideally, you should think about applying for a new mortgage two to three months before your existing mortgage comes to an end. It can take a month to get an offer from a mortgage lender, but it can sometimes be quicker and offers will usually be valid for three months or to a specific completion deadline.
As with anything financial, it pays to shop around and compare what the different providers are offering – but we understand that you might not know where to begin. But that’s ok, we’ve got you covered. We will help you find the most suitable mortgage renewal for you and your needs, to save the hassle of doing it yourself.
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Is it Difficult to Remortgage?
If you’re staying in your current home for your mortgage renewal, it will be more straightforward than if you were to move home. But you will still have to assess how much you can borrow, which depends on a number of different factors including how much equity you have in your home, what your income and outgoings are and your credit rating.
When you apply for your mortgage renewal, it can be tempting to increase the term, for example, back to 25 years to keep repayments down. However, by doing this you’ll end up shelling out thousands on additional interest. So if you can afford to, try to reduce the term of your mortgage to 20 years. That way you’ll save yourself five years’ worth of interest.
However, by reducing the length of your mortgage, you will be increasing your monthly mortgage repayments. So if you had a mortgage of £150,000 on a rate of 2.5%, you’d pay £673 a month over a 25-year term, but £795 a month over a 20-year term.
What Happens if I Don’t Do Anything?
If you don’t make preparations for your mortgage renewal, it could cost you. You’ll be moved onto your lender’s standard variable rate (SVR). A Standard Variable Rate is a type of variable rate, which means that your payments can go up or down according to changes in interest rate.
The SVR varies between lenders but is typically pegged a few percentage points above the Bank of England base rate. Because the SVR is variable, it can change at any time (SVRs do not always follow the base rate), so be aware that your monthly repayments can go up and down too.
SVRs can also be quite expensive and can cost more than the best tracker rate mortgages available. They also do not provide you with the payment security of a fixed rate, as the amount you pay can go up or down.
SVRs are not that competitive, so there’s a chance that you will end up forking out far more than necessary if you stay on your lender’s SVR.
Give Us A Call
If you’re unsure which mortgage is right for you all you need to do is give us a call and we’ll help point you in the right direction.
Get A Mortgage With Regal in 3 Easy Steps
Step 1
Complete an enquiry form and an advisor will call you back.
Step 2
Send us the documents we need.
Step 3
Receive a Decision in Principle from one of our lending panel.
