Why should I remortgage?

If you are looking to change from an interest-only to a repayment mortgage, most lenders can arrange this without the need to re-mortgage.

However you might be looking to re-mortgage because your personal (or wider economic) circumstances have changed, to borrow additional funds, to consolidate debt…or simply to:

Secure a more competitive interest rate
Whilst your current lender may be able to offer you a new rate going forward, have you considered it against the rest of the market? A lender is not obliged to offer you the lowest rate and, depending on the level of borrowing, asking Cowens to help review your options could save a lot of money on monthly payments.

Another important factor to consider when re-mortgaging is timing. Some typical situations might include:

My fixed rate term is ending
If the period of your fixed-rate mortgage is coming to an end, you will ordinarily revert to the Standard Variable Rate of Interest set by your mortgage provider and might want to consider whether this is the most economic use of your funds since it will typically result in higher monthly payments.

Bank of England base rates are changing
If you have a mortgage other than a fixed-rate, then your monthly repayments can be affected by fluctuations in the national base rate of interest.

My property has increased in value
If the value of your home has risen since you took out your mortgage the Loan to Value ratio on your loan will have fallen, providing you with an opportunity to take advantage of a more competitive interest rate. If, however, you only have a minimal amount left to repay on your mortgage, ordinarily the fees involved in re-mortgaging are likely to outweigh any potential savings.

I’m looking for more flexible mortgage options
Some mortgages come with advantages such as the option to take a payment holiday. If your existing package does not have flexible options you might consider re-mortgaging to benefit from a product that does.

Similarly some mortgages don’t allow you to overpay in order to pay off your mortgage earlier than intended. Again you may wish to look for lenders who permit overpayments, though you need to consider whether there are exit fees associated with your existing mortgage.

I’m looking to increase my borrowing
Re-mortgaging sometimes provides a finance option to those looking for additional funds for e.g. home improvements or a large purchase – or to consolidate debt. If you are looking to consolidate debt we advise you to think carefully before securing other debt against your home. A standard loan could be a cheaper option and remember – your home may be repossessed if you do not keep up with repayments on a mortgage or any other debt secured against it.

My circumstances have improved
It may be that when you first took out a mortgage your individual, or wider, financial circumstances led to a specialist lender charging a high interest rate. After you’ve maintained a mortgage for several years with no poor credit, it may be that more and better options are available to you.