How to get the best remortgage deal

Couple remortgaging

Is your mortgage deal about to expire? Many homeowners are coming to the end of fixed-rate mortgage deals in 2024, many of whom have enjoyed interest rates below 2% for the past few years. With the Base Rate hovering at 5.25% and the general election looming, it is hard to predict which way the base rate will go and how quickly. This is a source of anxiety for many homeowners. ​

So, how do you decide which remortgage deal to take, and should you stick with your current lender or find a different one?

To get the best remortgage deal possible, start the process at least 6 months in advance. Shop around to compare deals and consider a mortgage broker. Be aware of how your loan-to-value affects the interest rate you are offered. Also, note the fees as they affect the overall cost of remortgaging.

Whether your current deal expires soon or you are looking to remortgage before your current mortgage deal ends, read on for Goldmanread’s guide on how to get the best remortgage deal.

As whole-of-market brokers, we can compare remortgage rates from a wide range of lenders to find the best deal for your circumstances. For professional remortgage advice, contact the experts at Goldmanread.

Does my house get revalued when I remortgage?

Even if you decide to stay with the same lender, they will instruct a valuation of your property to determine your current loan-to-value ratio, i.e. the amount of your mortgage compared to the value of your property. The LTV influences the interest rate and terms you will be offered.

This valuation is not the same as a full structural survey. It’s likely that the lender will instruct a desktop or driveby valuation, the latter of which may include a brief internal inspection.

Can you remortgage to get a better rate?

If the current interest rate falls below your mortgage rate, then it could be wise to compare remortgage deals to see if you could move to a cheaper rate and reduce your monthly mortgage payment. With mortgage rates hitting a 15 year high in late 2023, many homeowners will be eagerly monitoring them in the coming months to see if they can secure a lower interest rate elsewhere.

Conversely, cautious homeowners may be keen to find a new mortgage sooner rather than later in case interest rates rise again.

It’s important to keep an eye on Bank of England announcements and economic commentary, but even if you have the time (and will!) to do so, it is very hard to predict. The advice of a mortgage professional like Goldmanread could provide valuable insight to help you make a prudent decision.

Can you remortgage before your current deal ends?

As mentioned above, some homeowners may consider remortgaging before their current mortgage deal expires to secure better interest rates and save money on their monthly payments.

Some choose to remortgage to release equity (i.e., borrow money from the value of their home) for things like home improvements, for example.

Some also seek a remortgage to borrow additional money, maybe to consolidate debts or invest in a second property.

If your property value increases, you will have more equity in your home, so you might also wish to seek a new deal to take advantage of the lower loan-to-value ratio.

Whatever your reason for remortging before your initial deal ends, it’s important to factor in a potential early repayment charge.

Tips on getting the best remortgage deals

Let’s take a look at what to consider and the steps to take in order to find the best remortgage deals.

Start the process early

You should start the remortgaging process about six months before your existing mortgage deal ends. This allows plenty of time to explore different deals, complete the application process (if you are switching to another lender) and account for any increase in your monthly repayments or early repayment charges.

If you don’t take action, you could end up on your lender’s standard variable rate (SVR) at the end of your fixed-rate period. This can be as high as 8-9%, so it is important that you get a deal in place in good time.

Some lenders allow borrowers to lock in remortgage deals up to six months in advance with no fees or obligations, so it’s worth securing a good deal as soon as you can in case the interest rate shifts in the wrong direction.

Shop around

In 2023, over 100 lenders were in the UK mortgage market, offering thousands of different products. These included major banks, smaller building societies, and specialist lenders. With so much choice, it’s important to do your research and shop around for the best mortgage deal available to you.

Aside from the interest rate, many lenders offer incentives such as cashback and free legal and valuation fees.

Speak to a mortgage broker

The growth of comparison sites has made it easier to compare rates in recent years, but it can still seem like a daunting task when your financial security is at stake. Not to mention that it can take considerable time and effort. That is why many homeowners choose to work with a reputable mortgage broker to find a new remortgage deal.

An mortgage broker like Goldmanread has access to a wide range of mortgage products from various lenders, which might not be available directly to consumers. Brokers can provide advice for your unique financial circumstances, help to find the best mortgage rate, and unravel complex terms. They can also save you time and effort by handling much of the paperwork and liaising with lenders on your behalf.

Know your loan-to-value (LTV) ratio

Knowing your LTV ratio before remortgaging is crucial because it directly affects the remortgage rates and terms you will be offered. A lower LTV ratio typically qualifies you for better interest rates and more favourable loan terms because you are considered a lower risk.

Also, understanding your LTV in advance can help you decide whether to make extra payments to reduce your mortgage balance before your current term ends, which may give you access to better remortgage rates when the time comes.

Be aware of the fees involved

When shopping around, it’s natural to seek out the best remortgage rates as the key indicator of a good deal. However, it’s very important to weigh up the overall cost involved as well as the remortgage rate to ensure you are getting the best deal. Some lenders offer competitively low interest rates, but the product’s high fees may negate the savings to some extent.

Whether you are looking to switch mortgages or stay with your existing lender, you should factor in a property valuation fee. If you are moving to a new lender, they will likely charge an arrangement fee, but some waive it as an incentive.

If you are moving to a new lender, they may charge arrangement fees, which typically range from £500 to £2,000. Your existing lender may enforce an early repayment charge if you switch. If you stay with them but on a different product, you may encounter product transfer fees.

Looking to secure a new mortgage deal? Get in touch with Goldmanread

If your existing mortgage deal is due to end within the next six months, don’t delay. Start researching the market now for a suitable deal, and give yourself time to budget for a potential increase in your monthly repayments.

At Goldmanread, we have been helping homeowners remortgage for over a decade. Our advice can help you secure a better remortgage deal for your circumstances to protect your home and financial future.

Contact us today to get started.

Conclusion

To find the best remortgage rates when your existing deal period ends, it’s important to start as early as six months in advance and shop around. Enlist the help of a broker to save you time and find the best rates available to you from a wide range of lenders.

Be aware of your loan to value ratio, as this will affect what interest rate you can get. Remember to factor in extra costs like the valuation fee and arrangement fee, as these will contribute to the overall cost of the remortgage.

If you are looking to remortgage before your current deal expires, to release equity or consolidate debts, for example, be mindful of any early repayment charges from your existing lender.

Remortgage FAQs

What is the best interest rate for a remortgage?

This very much depends on market conditions at the time you remortgage. To find the best remortgage rate, start by checking comparison websites or speaking to your mortgage broker.

It’s important to understand that your LTV ratio and credit score affect the interest rate you will be offered. A lower LTV will give you access to better deals, as will a lower credit score. Don’t forget to consider the fees involved and the overall cost of the mortgage, not just the interest rate.

Should I take a 2-year or 5-year fixed term?

Given the current cost of living crisis, many homeowners prefer the stability of fixed rates. Deciding between a 2-year or 5-year fixed-term mortgage depends on your individual circumstances and market conditions.

A 2-year fixed term gives you more flexibility to switch deals sooner, but a 5-year fixed term provides longer-term stability and protection against potential interest rate rises. Talk to a mortgage professional to help you choose the right deal for your financial circumstances and to help meet your short and long-term goals.

To learn more about mortgage terms, read our helpful blog here.

How does the loan to value of a property affect remortgaging?

Loan to value (LTV) is crucial in remortgaging as it determines the interest rate you qualify for; a lower LTV often leads to better rates and significant savings over time. To reduce your LTV, consider making overpayments in the lead-up to remortgaging.

Do lenders check credit ratings for remortgage deals?

If you are staying with your existing mortgage lender and not changing the mortgage term, it’s unlikely they will carry out stringent financial checks unless you are looking to borrow additional money.

However, if you are applying for a new deal with a different lender, it will be treated in the same way as if you were purchasing a new property. They will carry out a check on your credit rating as well as require proof of income. So it’s important that you check your credit score in advance of remortgaging and take action in advance if necessary.

Picture of Clive Read
Clive Read

Clive Read is an appointed representative of PRIMIS Mortgage Network. PRIMIS Mortgage Network is a trading style of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority.

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