The main and most important time to switch is when there’s a positive advantage in moving mortgages.
Short answer, yes, you can Remortgage at any time. However, there’s no point doing it just for the sake of switching to a different lender. The main and most important time to switch is when there’s a positive advantage in moving mortgages, such as:
Interest Rates are lower than what you’re paying
You have or have built up equity of at least 10% in your current home.
You’ve come to the end of a fixed rate mortgage deal
The benefits outweigh the costs.
So really, it’s simple! You can switch mortgages just as easy as you would normally do when switching from one energy provider to another.
Stephen Kerrigan, mortgage advisor from Doncaster, and owner of Mortgages Remortgages mentioned that lenders are coming out with new mortgage deals each day and, particularly if you’ve had your mortgage for a few years, you’ll probably find there are cheaper deals around.
You can however, lock in to a low interest rate with a fixed rate mortgage, as long as you know that your repayments will stay the same for the next few years.
Be careful of a few risks, and one to watch out for! If your existing mortgage is a special deal, you might be tied down and you might have to pay an early repayment charge for switching before the end of the current deal.
Equity is the amount of your home that you have paid for. The rest is mortgaged. The proportions are called the loan to value ratio (LTV). If the price of your house has gone up, your mortgage will be a smaller percentage of the property's value than it was when you started.
Fixed rate mortgages run for a set term, typically between 2 and 10 years, and then move to the lender's standard variable rate of interest (SVR) which is probably higher. If you have a fixed rate mortgage at the moment, when you get to the end of the period, you'll need to Remortgage if you don't want to stay on the variable rate.
Whether interest on the new loan is the same as you've been paying, higher or lower, depends on what's happening to rates at the time. You do not have to stay with the same lender and should certainly shop around to see what is on offer.
Switching from one lender to another involves charges. You will nearly always have to pay several different fees, such as Arrangement Fee, Valuation fee, legal fees, and an exit fee.