The last two years or so have certainly brought their challenges. If the truth is told, they have also brought about the odd benefit: it wasn’t so long ago that we had interest rates at a historic low. This was great news for those on variable, or tracker, mortgages as well as those looking to switch deals. A remortgage calculator has been used by many to explore the savings that they could enjoy.
Now, in 2022, things have changed. With interest rates on the way up, inflation set to break records, and energy costs set to cripple many, there’s a need to save money. Could remortgaging your home be the solution (your home may be repossessed if you do not keep up repayments on your remortgage)?
What is a remortgage?
There’s a very good chance that you’ve heard of remortgaging and there’s an equally as good chance that you’re not quite sure what it actually is. We’ve put together a helpful guide, that you can find here, but in basic terms, it is about moving your mortgage from one product to another. This could be with the same lender that you’re already with or with a completely different mortgage company.
We’ve all got used to shopping around looking for the best deals when it comes to car insurance, broadband, and credit cards. The remortgage process sees you doing exactly the same for your mortgage. Given that a mortgage is perhaps the biggest financial commitment many will ever make, it is certainly worth taking the time to ensure that you have the best deal for you.
Why would I want to remortgage?
In simple terms, it’s all about saving money. At Trussle, we’ve been voted the Best Mortgage Broker in the 2021 British Bank Awards, so you can be sure that we’re pretty good at what we do and can give you the best possible chance of finding savings.
While remortgaging will always be about getting a great deal, and saving money, here’s a look at some more specific reasons why it may be the right option for you to explore:
The value of your home has gone up
If you’ve looked into any of the online valuation tools, you may have realised that your home is now worth more than what you paid for it. Certainly, right now, we are experiencing a seller’s market. The supply can’t keep up with the demand and so you’re able to achieve an even higher sale price if you looked into selling.
What that means, as someone with a mortgage, is that your loan to value (LTV) ratio will have changed. Typically, if you have a lower LTV, you will pay less when it comes to your monthly mortgage payments.
Worrying about interest rates
While not the best news for savers, those borrowing in the UK have experienced some great interest rates since around 2008. This reached its pinnacle in 2020 when interest reached a historic low of 0.1%. From such a position, there is only one way to go: up.
Rates have already been raised by the Bank of England twice this year, and there’s a pretty good chance that more are on their way. While 0.75% is still low, a remortgage now allows you to seal a deal while interest rates are still so favourable.
Controlling your monthly spend
There is a real possibility that people could be facing bills of £3,000 per year when it comes to energy. Add to this the soaring price of fuel for your car, inflation being at its highest for 30 years, and many are feeling that they have no control over their finances.
While remortgaging can’t bring down the cost of your other bills, it can bring you some significant savings. At Trussle, our customers save an average of £290 a month. That’s more than enough to help you deal with those increasing energy bills.
You want to make overpayments
While there is plenty of doom and gloom when it comes to looking at the economy, it’s worth noting that we’re also in an employees market. The great resignation means that employees are able to take their pick of jobs and, those who are qualified, can command a larger wage.
There are plenty of benefits of making overpayments, and a wage increase could give you the perfect opportunity to start doing this. However, not every lender will allow you to do this. When this is the case, a remortgage could be the answer.
You simply want to borrow more
It could be that you just want to release some more money from your home. For whatever reason, your current lender may say no, leaving you frustrated, and without the funds that you were looking for. In this instance, a remortgage could certainly help.
By looking at the market, you’re likely to find a lender that will lend you what you’re looking for. Just be sure to factor in any fees too. These could include admin and early exit fees.
Should I be looking at a fixed-rate mortgage?
We have become so used to interest rates being low, and getting lower, that fixed-rate mortgages haven’t necessarily held the appeal that they once did. However, rates are now beginning to shift, and the Bank of England expects them to be around double what they are now come 2023.
With almost every other monthly expense on the up, it makes sense to lock in a deal and to know exactly what you’ll be paying for the long term.
How Trussle can help with your remortgage
A remortgage is a great way to combat the increasing cost of living. At Trussle, we are an award winning broker with access to 90 lenders and around 12,000 products, we’re in the position to help to find a deal that works for you.
In these times of uncertainty, why not get in touch today and let us take away one more worry?