How to Pay Off Your Mortgage Early
Are you dreaming of a life without mortgage payments? Paying off your mortgage early can free up your finances and
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What’s the difference between a mortgage and a remortgage?
Remortgaging is slightly different in that you are not normally moving house or purchasing a property, but moving an existing mortgage to another lender, or releasing some money from your mortgage for another purpose e.g. home improvements.
A remortgage can be a good way to save money. Cutting just 1% off your mortgage interest rate could result in an average saving of £80 per month, but you need to ensure you offset the cost of remortgaging against any savings you are looking to make.
Why remortgage?
You may have had a fixed term mortgage that is coming to an end so you’re looking for an alternative deal to take its place.
You may be considering moving house or climbing the property ladder so you need to change your mortgage.
You may wish to save money by finding a better deal.
You want to consolidate other outstanding debts.
Your financial circumstances may have improved and you want to make additional mortgage payments.
Finding the best remortgage deals
Remortgaging is not something to be taken lightly as there are inevitable costs involved. These costs can include exit fees from your current mortgage, arrangement fees for the remortgage, valuation fees, conveyance fees and stamp duty fees. You need to take all of these costs into account before you begin to look at the different remortgage deals that are out there.
You will need an idea on how much you wish to remortgage for and how much you can afford to pay in monthly instalments. Then compare the various types of mortgage deals available and see what works best for you.
Say goodbye to high monthly payments with a smart remortgage
Your home is likely your biggest financial commitment and remortgaging could be a smart way to reduce your monthly costs, lock in a better rate, or free up funds for something important. Whether your current deal is ending or you're simply exploring your options, a remortgage could help you take control of your finances.
At MoneySpider, we make it easy to compare remortgage quotes tailored to your needs — quickly, clearly, and securely.
Am I eligible for a remortgage?
If you are considering a remortgage, think carefully about your reasons why, compare the deals to see what works for you, look at the total cost and identify who will take forward the remortgage.
You will need to look at your finances to be able to determine how much you can afford in monthly instalments.
Lenders will take into account lots of information to ensure they make the right decision. They will need to know personal details such as the name of the applicant, age, address, income and expenditure figures, and they will also take into account the applicant’s credit history.
Lenders tend to be more selective than in recent years, with people with better credit ratings having a higher chance of approval. However, there are some lenders who specialise in lending to those with poor credit ratings so it may not prove impossible.
What are the different types of remortgage rates?
Fixed rate
With a fixed rate remortgage, your repayments are guaranteed to stay the same every month for a period, usually two or five years. However, fixed rates are sometimes higher than variable rates.
Standard variable rate
This is your lender’s standard interest rate for remortgages. You’ll be moved onto this at the end of a time-limited remortgage rate if you don’t switch and you’ll probably be paying more than you need to be.
Discounted variable rate
Your interest rate is linked to your lender’s SVR (standard variable rate) minus a set percentage. The SVR can change at your lender’s discretion, so your monthly repayments will go up and down.
Tracker mortgage
Your interest rate tracks the Bank of England base rate plus a set percentage. So as the base rate goes up and down, so will your monthly repayments.
Fixed or variable offset remortgages
An offset remortgage links your savings to your remortgage and ‘offsets’ their value against the loan balance. So you would pay less interest on your remortgage but your savings won’t earn any interest.
Interest only
This allows you to pay just the interest charged on the loan each month which can mean lower monthly payments but you still have to plan to repay the amount you’ve borrowed at the end of the term.
FAQ
Need more help?
Why might it not be a good idea to remortgage?
Even when there are the best remortgages available, the timing might not be right for a remortgage. For example, if someone is currently on a really good deal then it may be better to wait until that deal is finished and then remortgage. Alternatively, someone may be on a really poor deal where they might incur extreme penalties if they try to move before the end of the term of the current deal.
Do you need any credentials to apply for a remortgage?
It will be necessary to prove an income and this is normally by providing three months pay slips. Also the lender will need proof of identity (usually two forms), passport, driving licence or utility bill.
How much deposit is required for a remortgage?
This will be required if remortgaging to purchase another property, but not if it is to alter the terms of your mortgage, or moving to an alternative lender and the current property will be used as security. The amount of any deposit for a new property will vary depending on the lender and the terms of the remortgage. Look for the best remortgage that suits your needs and the amount of deposit you have available.
If I am now self-employed can I get a remortgage?
It is possible to obtain a remortgage if you’re self-employed. If you were initially employed when you obtained your original mortgage and think you may have difficulty now remortgaging you need to consider carefully why you want to remortgage. However, to remortgage requires the same information as someone who is employed but you will need to provide 3 years worth of business records instead of the wage slips.
Which mortgage lenders do you compare?
You will be able to compare mortgage deals from across the market and save with some of the biggest providers in the UK including Nationwide, Barclays, TSB, Santander, Scottish Widows and many other lenders.
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