As your fixed-rate mortgage term comes to an end, it’s crucial to understand the options available to you. This period can be both exciting and daunting, but with the right information, you can make a decision that best suits your financial situation and future goals.
When is the best time to remortgage? As with anything, there is a balance. It is wise to secure a new mortgage deal as early as possible. However, you don’t want the new mortgage offer to expire before your current deal ends. The good news is that a lot of lenders’ mortgage offers are valid for up to six months. This provides optimum time to research, process and secure a new mortgage deal, all in time for the switch and to avoid any early repayment charges
Here are the main options to consider:
- Arrange a Product Transfer
A product transfer involves switching to a new mortgage deal with your current lender. This option can be convenient and quick, as it often requires less paperwork and no need for a new property valuation. Here are some benefits and considerations:
- Pros:
- Simplicity: The process is usually straightforward since your lender already has your details.
- Speed: Transfers can be completed relatively quickly.
- No Legal Fees: Typically, there are no legal fees involved.
- Cons:
- Limited Options: You are restricted to the products offered by your current lender, which may not be the most competitive in the market.
- Potential Higher Rates: Your current lender’s rates might not be as favourable as those offered by other lenders.
- Remortgage to a New Lender
Remortgaging involves switching your mortgage to a different lender. This option can potentially offer better rates and terms:
- Pros:
- Competitive Rates: You may find better interest rates and terms with a new lender.
- Incentives: Some lenders offer incentives such as cashback, free valuations, or legal fees to attract new customers.
- Flexibility: You have the opportunity to choose from a wide range of products that better suit your current financial situation.
- Cons:
- Time-Consuming: The process can be more time-consuming compared to a product transfer.
- Credit Check: A new lender will conduct a credit check, which could impact your credit score.
Key Considerations
When deciding between a product transfer and remortgaging, consider the following:
- Interest Rates: Compare the interest rates offered by your current lender and other lenders.
- Fees and Charges: Take into account any fees associated with switching, including legal fees, valuation fees, most lender offer these free.
- Flexibility: Consider the flexibility of the mortgage terms, such as the ability to make overpayments or take payment holidays.
- Future Plans: Think about your long-term financial goals and how your mortgage fits into those plans.
Final Thoughts
The end of a fixed-rate mortgage term is an excellent opportunity to reassess your financial situation and make a decision that aligns with your goals. Whether you choose to arrange a product transfer with your current lender or remortgage to a new lender, it’s essential to seek professional advice for a Mortgage Broker.
Mortgage Brokers have access to different mortgage products we can help you to find the most suitable mortgage solution personalised to your requirements.