Preparing for a remortgage takes effort, especially if there are concerns about affordability, but being proactive can lead to substantial long-term savings. Before diving into rate comparisons, enhancing your mortgage credentials by improving your credit report and exploring other ways to strengthen your financial standing is crucial. Given the significant number of mortgage deals expiring monthly, getting ready for a remortgage is a common consideration for many individuals.
To avoid being placed on SVR, it is recommended to initiate the process of switching your mortgage 3-6 months before your existing deal comes to an end.
When your mortgage’s initial term is nearing its end, it’s essential to be cautious. Typically, you are transitioned to your lender’s considerably pricier standard variable rates, which currently range from around 7.5% to 8.5%. 
Ideally, you should secure a new mortgage that begins immediately after your current deal expires. However, given the unpredictable nature of today’s mortgage markets, where rates fluctuate in response to economic factors, whether the rates available today will be better than those offered in a few months is still being determined. Therefore, exploring multiple options and considering various rates is advisable before deciding.
Shortening the duration of your mortgage
Many homeowners aim to secure a better interest rate and benefit from reduced monthly payments when considering remortgage. However, another key advantage is the potential to shorten the overall mortgage term. By opting for a lower interest rate, you may choose to increase your monthly repayments, leading to significant long-term savings.
At first, this approach might seem unexpected, as most borrowers prioritise minimising their monthly payments. Yet, securing a rate substantially lower than the Standard Variable Rate (SVR) or even an initial fixed rate often results in only a modest rise in payments.
By securing a lower interest rate through remortgaging, you can strike a balance between affordable monthly repayments and meaningful savings over time.
Most lenders offer an initial fixed interest rate for a set period. Once this term ends, it is important to review your mortgage options. Reducing your mortgage term and gradually increasing monthly payments as your income rises allows you to clear your mortgage sooner than initially planned.
Engaging the services of a mortgage broker can assist you in determining the suitability of your options.
To determine the best course of action for your specific situation, we recommend engaging the services of a mortgage broker. Whether interest rates are currently low or high, numerous factors influence your most suitable mortgage option. To begin, you can utilise our Mortgage Best Buys comparison tool to establish a benchmark for your top deals.
However, unless you possess extensive knowledge of mortgages, we strongly advise consulting a broker when proceeding further. You can refer to the top mortgage brokers section to find a reputable professional. 
We recommend this for several reasons:
- Finding the right deals can be challenging as lenders often offer varying lock-in periods for rates, even within their own range. Brokers will likely possess information regarding deals that can be held for several months.
- Pursuing mortgages with minimal or no upfront costs is best before completing the mortgage process. Brokers are knowledgeable about which mortgages fall into this category.
- There are inherent risks and potential outcomes to consider when navigating the mortgage landscape. A broker can provide valuable advice and guide you through these complexities.
- Brokers possess information that is often difficult for individuals to find independently, such as lenders’ credit and affordability criteria. By leveraging their expertise, brokers can enhance your chances of being approved for the right mortgage deal that aligns with your needs.
Partnering with a reputable mortgage broker significantly simplifies the process, provides access to crucial information, and helps you secure the most suitable mortgage deal for your circumstances.
Working out your loan to value (LTV)
Follow these steps to calculate how much of your home you own and determine your loan-to-value (LTV) ratio. Knowing your LTV is crucial, as it can affect the mortgage rate you may qualify for.
1. Determine Your Current Property Value:
Use trusted sources or consult a property appraiser to estimate your home’s current value.
2. Calculate the Remaining Mortgage Amount:
Subtract the amount you still owe on your mortgage from the estimated property value.
3. Calculate Your LTV:
Divide the remaining mortgage amount by the current property value. Multiply the result by 100 to express the LTV as a percentage.
Example Calculation:
If you owe £250,000 on a property valued at £435,000, your LTV would be 57% (£250,000 / £435,000) x 100.
Important Considerations About LTV:
Your LTV ratio may have changed since obtaining your mortgage. If your property value has risen, your LTV may have decreased. On the other hand, if the value has dropped, your LTV could be higher.
Why LTV Matters:
The more equity you have (the debt-free portion of your property), the lower your LTV. A lower LTV can help secure better interest rates when remortgaging.
Releasing Equity Through Remortgaging:
You can remortgage to release equity for purposes such as home improvements. However, this involves borrowing more than your current mortgage balance. Be mindful of the risks, as this may increase your monthly payments and extend the repayment term.
Key Factors to Consider When Remortgaging
1. Act Early:
Remortgage rates can change, so starting early may help secure better interest rates. Acting promptly can prevent missed savings opportunities.
2. Early Repayment Charges:
Exiting a fixed-term mortgage early may incur charges. Review your existing mortgage agreement to understand any fees before proceeding.
3. Seek Professional Advice:
Connect Mortgages has experienced advisers who offer tailored guidance. We can help explore remortgage options and ensure decisions align with your financial goals.
Contact Us for Expert Support:
For further assistance, contact our team at Connect Mortgages. We provide detailed information and ongoing support throughout the remortgaging process.
Thank you for reading our publication “The Power of Elite Proactive Remortgaging | Connect Experts.” Stay “Connect“-ed for more updates soon!
