The Power of Elite Proactive Remortgaging
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
When remortgaging, the common expectation is to obtain a better interest rate and enjoy the advantage of lower monthly payments. However, another factor to consider: by securing a lower interest rate through remortgaging, you can 
reduce the overall duration of your mortgage. By increasing your monthly repayments, you can achieve significant long-term savings.
At first glance, this concept may appear counterintuitive, as most people prefer to keep their monthly payments as low as possible. However, when you find a rate that is considerably lower than the Standard Variable Rate (SVR) or even better than your initial fixed rate, the resulting increase in monthly payment is often minimal in comparison.
In essence, by taking advantage of a lower interest rate during the remortgaging process, you can achieve a balance between manageable monthly payments and the potential for substantial savings in the long run.
Typically, lenders provide an initial fixed interest rate for a specified period. Once this term expires, it is advisable to reassess your mortgage. Gradually reducing the duration of your mortgage and augmenting your monthly payments as your income grows enable you to repay your mortgage faster than initially anticipated.
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 it comes to 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.
In summary, 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. It is essential to know your LTV as it can impact the mortgage rate you may be eligible for.
- Determine your current property value: Use reliable sources or consult a property appraiser to estimate the current value of your home.
- Calculate the remaining mortgage amount: Subtract the amount you still owe on your mortgage from the estimated property value.
- Calculate your LTV: Divide the remaining mortgage amount by the current property value. Multiply the result by 100 to obtain the LTV as a percentage.
For example, if you owe £250,000 on a property valued at £435,000, your LTV would be 57% (£250,000 / £435,000) x 100].
It’s important to note that your LTV ratio may have changed since you obtained your mortgage. If your property has increased in value, your LTV may have decreased. Conversely, you may face a higher LTV if the property value has decreased.
LTV is a significant factor because the more equity you possess (the debt-free portion of your property), the lower your LTV. A lower LTV can often result in obtaining a more favourable interest rate when remortgaging.
It’s worth considering that while you can remortgage to release equity for purposes like home renovations, this involves borrowing more than your current outstanding mortgage balance. However, it is essential to recognise the associated risks, as it will lead to higher monthly payments and potentially prolong the debt repayment period.
In a nutshell, when considering a remortgage for your home, there are several important factors to keep in mind:
- Act early: Remortgage rates are subject to fluctuations, so starting the process early is beneficial to secure the best possible interest rates. By being proactive, you can avoid missing out on potential savings.
- Early repayment charges: If you are currently on a fixed-term mortgage and wish to exit before the term ends, be aware that you may incur early repayment charges. Reviewing your existing mortgage agreement and understanding any associated fees before deciding is crucial.
- Seek professional advice: Connect Mortgages employs experienced advisers who can provide personalised guidance based on your unique circumstances. We can explore various remortgage options and help you make informed decisions that align with your medium and long-term financial goals.
For further assistance and to discuss your specific situation, don’t hesitate to contact our knowledgeable team at Connect Mortgages. We can give more information and support throughout the remortgaging process. 
