Is Now a Good Time to Remortgage?
The honest answer is: it depends. Here is how to work out whether now is the right time for you.
"Is now a good time to remortgage?" is one of the most-asked questions in the mortgage world, and the honest answer is: it depends. It depends on where you are in your current deal, where rates are, and what you are trying to achieve. Here is a framework for thinking it through.
Where are you in your current deal?
The first question is timing. If your current fixed or discount deal ends within the next six months, you should be looking actively, most lenders let you lock in a new rate up to six months ahead. If it ends further out, the economics usually favour waiting, unless rates have fallen far enough to make paying an early repayment charge worthwhile.
Do the ERC maths
If you leave a fixed deal early, the lender charges an early repayment charge (ERC), typically 1–5% of the balance. For some borrowers, switching to a lower rate saves enough over the remainder of the term to outweigh the ERC. For others it does not.
A mortgage adviser can model this precisely. Feed in your current rate, balance, time remaining, ERC, and the new rate, and the numbers will tell you whether the switch pays for itself.
Are you on the SVR?
If you have already drifted onto your lender's standard variable rate (SVR), almost any fix or tracker will be cheaper. SVRs typically sit 2–4 percentage points above available fixed rates. A single month on SVR can cost hundreds of pounds more than a fixed product would.
What else are you trying to achieve?
Remortgaging is not only about rates. Other common reasons to remortgage include:
Releasing equity, to fund home improvements, help family, or consolidate higher-cost debt. Changing the term, to reduce monthly cost (longer) or pay off faster (shorter). Changing lender for better customer service, product features, or appetite for your income type (e.g. self-employed).
The right answer for you
For most borrowers whose current deal is ending, the answer is yes, start the process now, lock in a rate, and monitor for improvements. For borrowers with two or three years left on a competitive fix, the answer is usually to wait unless market rates have moved substantially lower.
A 30-minute conversation with a mortgage adviser will usually give you a clear answer for your specific circumstances.
Key takeaways
- If your deal ends within six months, start the process now
- Lock a rate early and switch to a lower one if the market drops
- Paying an ERC can make sense if the savings over the remaining term outweigh it
- If you are on the SVR, act today, almost any product is cheaper
- Remortgaging is not only about rates, term, lender and equity release matter too
Talk to a real adviser
Mortgage advice. Named adviser. No call centre.
Think carefully before securing other debts against your property. Your property may be repossessed if you do not keep up repayments on your mortgage.
Major Money Matters Ltd is an appointed representative of Sesame Ltd which is authorised and regulated by the Financial Conduct Authority. FCA reference: 409534. Registered office: 133 Shepherds Hill, Harold Wood, Romford, RM3 0NR.