Should I remortgage now?

Mortgage rates remain higher than we are used to, but they are falling. So is now a good time to remortgage or should you wait? Can you lock in a deal now and switch last minute? And should you fix, and if so, for how long? Let us help you decide if you should remortgage now...

Angela Kerr Director, Editor

Should I remortgage now?

If your current mortgage deal ends in the next six months you should start the remortgage process now. According to the Financial Conduct Authority you’re not alone; 1.5 million homeowners are due to meet the end of their fixed mortgage deal in 2024.

Whether you’ve started looking, or aren’t sure where to start, it’s a good idea to chat through your options with a fee-free mortgage broker. They can help find the best deal for you, which you can lock in six months in advance. You can then keep an eye on rates to see if a better deal comes up over the coming months before you commit. Our mortgage broker partners at L&C offer this Rate-Check service for free.

Use our online mortgage finder to compare your current mortgage with other deals.

If you’re on your lender’s standard variable rate, you should urgently review your remortgage options because typical SVR rates are significantly higher than the best remortgage deals available.

There are other reasons why you may want to remortgage now such as to fund home improvements or pay off debt, read on to find out more.

Can remortgaging save me money?

Remortgaging can save you money if you switch from an expensive SVR mortgage onto a cheaper deal. If you’re coming off a cheap fixed rate mortgage in 2024, your new mortgage is likely to cost you much more than your current one as even the best mortgage rates are much higher than the deals we’ve seen in recent years.

But remortgaging could still save you money because if you do nothing and end up on your lender’s SVR it could cost you even more.

Here’s an illustration of mortgage costs, based on a 25 year term, if you’re coming off a 2% fix. You can also use our mortgage calculator to check how much your new rate would cost you.

So if you’re asking yourself should I remortgage now? it’s vital to get expert advice.

Get fee-free remortgage advice from our partners at L&C. Start online or give them a call today about your mortgage needs.

What’s happening to UK mortgage rates?

The Bank of England started hiking the base rate in December 2021 from its historic low of 0.1% as it battled inflation. As a result, those on variable rate mortgages saw mortgage rates increase with each hike while those looking for new fixed rate mortgages saw mortgage rates on deals shoot up.

However, mortgage rate forecasts predict that the base rate has peaked at its current level of 5.25% and interest rates are expected to fall in 2024. Some predict the first cut in interest rates may be in June 2024.

Against this backdrop, mortgage rates on fixed rate mortgages started falling in July 2023 and into 2024. But no-one knows for certain what’s going to happen to UK mortgage rates in 2024. So rather than trying to predict what will happen, instead it’s vital you focus on doing what’s right for you.

When you’re considering should I remortgage now? start by checking your mortgage deal. Remind yourself of your current rate, check when that deal ends, and penalties for exiting early – often called early repayment charges – and what mortgage rates are available now. It’s also a good idea to be aware of other remortgaging costs to bear in mind.

Can I fix a new mortgage deal before the end of my current mortgage deal?

Yes. You can start the remortgage process now if your current deal ends within the next six month. You can keep the rate you’ve got under review. While some brokers may charge you to re-check the market, our mortgage partners at L&C will do this free of charge so you know you’ll get the best rate available at that time.

Should I move to my lender’s Standard Variable Rate

In most cases, moving to your lender’s standard variable rate isn’t advisable because they can be extremely expensive and you may be able to save by remortgaging onto a better deal.

However, an SVR mortgage might be a good solution for some, for example, if you have a small mortgage. But if you’re asking ‘Should I remortgage now?’, don’t assume what the best option will be. Always speak to a fee-free broker to make sure you’re on the best deal for you.

Should I fix my mortgage?

You should fix your mortgage if you want budgeting certainty that the amount you’ll pay each month on your mortgage won’t change. But if you fix your mortgage, while your repayment amounts won’t increase during the term they won’t go down either if the Bank of England cuts the base rate.

How long should I fix my mortgage for?

If you’re asking should I remortgage now and want a fixed rate mortgage, you’ll need to decide how long you want to fix for.

Should I fix my mortgage for 2 or 5 years?

Whether a 2 or 5 year fixed rate mortgage is best for you will depend on your circumstances. You may want to fix for 2 years in the hope that mortgage rates will improve in the near future and that you’ll be able to remortgage onto a cheaper deal once your 2 year deal ends. Although you’ll typically pay a higher rate on a 2 year fix than a 5 year fix. Or you may prefer the security of a 5 year term. Or you might opt for a 3 year fix.

Should I fix for 10 years or longer?

The advantages of fixing for 10 years or longer are that you’ll have the security of knowing how much you’ll pay on your mortgage for a longer period. Plus, you’ll usually pay less in arrangment fees than if you take out multiple 2 or 5 year mortgages. Fixing your mortgage for 10 years or longer also protects you against changes to lending criteria; if a lender tightens up its lending criteria it may make it harder for you to get a mortgage.

However, fixing your mortgage for such a long time means you’ll run the risk of potentially missing out on better deals. Also consider what would happen if you move house? Some mortgage deals are portable which means you can take them with you penalty free if you move to another property. So make sure you check the small print.

Fixed vs variable rate and tracker mortgages

When you’re asking should I remortgage now, how do tracker mortgages and discounted variable rate mortgages compare to fixed rate mortgages?

Tracker mortgage: These go up and down in line with the Bank of England base rate. So if there’s a cut in interest rates, the amount you’ll pay on your mortgage each month would reduce.

Discounted variable rate mortgages: These work in a similar way but instead of tracking the base rate, it tracks the lender’s SVR at a discounted rate.

Some variable rate mortgages come with no early repayment charges which means you could switch to a different deal later down the line without having to pay a hefty penalty. For more information read our guide: What type of mortgage should I get?

Take a look at our online mortgage finder from L&C to see what fixed or variable mortgage deals you are eligible for from over 80 lenders 

Can I remortgage if I’m in the middle of my mortgage deal?

Yes. There are lots of reasons why you may want to remortgage in the middle of a mortgage deal such as to increase your borrowing. But whether it’s right for you will depend on your circumstances:

• Firstly, will you need to pay an early repayment charge if you remortgage? It’s vital you check this because these can be substantial. It’s advisable to talk it through with a fee-free mortgage broker.
• Secondly, you’ll want to consider the rate you can get now compared to the rate you’re currently on.

So if you’re asking should I remortgage now? and you’re in the middle of a mortgage deal before you decide, it’s critical to get advice. A broker can help with the calculations involved in switching and your application. They also have access to deals you can’t get by going directly to the lender and can find the right deal for your circumstances.

Why else should I remortgage now?

Apart from saving money, there are lots of other reasons you may ask ‘should I remortgage now?’

• Funding home improvements: If you’re planning an extension or home improvements, you may be able to fund the project by remortgaging and releasing equity from your home. See how to finance home improvements.
• Paying off debts: Some people remortgage to release equity to pay off debts they’ve accrued. However, if you do this your mortgage will be bigger and you may pay more interest in the long term. So it’s a good idea to get independent financial advice.
• To make overpayments. Another reason why you may want to remortgage is if you want to overpay on your mortgage and your current deal doesn’t let you do this.

What to do before remortgaging

If you’re asking ‘Should I remortgage now’, you’ll also need to make sure you’re in good financial shape before you apply to remortgage. This includes checking your credit rating and taking steps to improve it if necessary, staying out of your overdraft and paying all your bills on time. Find more tips in our guide How to get a mortgage in 6 easy steps.

Why shouldn’t I remortgage now?

There are some circumstances which mean remortgaging is unlikely to be a good option such as:

• If you are in negative equity, it is very unlikely you will find a remortgage deal.

• You’ve had major issues with your credit rating
• If your financial circumstances have changed since you took out your current mortgage such as you’ve stopped working or recently become self-employed.

Should I switch to an interest-only mortgage?

If you’re asking should I remortgage now, you may be considering switching to an interest-only mortgage. If so you’ll need to consider:

• Your monthly payments will be cheaper because you only pay the interest on your mortgage each month, you don’t pay off any of the capital. But an interest-only mortgage will usually cost you more than a repayment mortgage over its lifetime because you pay interest on the full amount throughout.
• The few lenders that offer interest-only mortgages on residential properties often require large deposits (50-to-60%), large annual household incomes (£75,000-to £100,000) or high-value repayment vehicles such as pension pots, the value of which must be 150% of the balance of the mortgage secured.
• Interest-only mortgages can be high-risk. What if your plan to pay back your mortgage at the end of the term doesn’t work? Find out more in our guide on Interest-only mortgages

Remortgaging when house value has increased

If you’re thinking about should I remortgage now and your house value has increased then this means your loan to value ratio (LTV) will be lower. And the lower your LTV, the more deals you’ll usually get access to and potentially better rates too. However, by ‘better’ this means compared to other deals currently on the market.

Remortgage calculator 

If you’re asking should I remortgage now you’ll want to know how much you’ll be able to borrow and what deals are available. To get an idea in a matter of minutes use our remortgage calculator provided by our mortgage partners at L&C.

Check out how much you can save by remortgaging with our online calculators and speak to fee-free mortgage experts today

Should I pay off my mortgage?

If you can afford it, paying off your mortgage may be the best option for you. But there are pros and cons to consider. For more information read our guide Should I pay off my mortgage.

Should I remortgage now: Have I left it too late?

It is too late to remortgage onto one of the ultra-low rates that were available in previous years. But just because mortgage rates are higher now isn’t a reason to not act.

The key is when you’re asking yourself should I remortgage now is to be fully informed about your options and the easiest way to do this is to speak to our fee-free mortgage broker partners at L&C.

Should I remortgage? How does it work: video