Buy To Let Remortgages

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Remortgaging is where you take out a new mortgage with a new lender on a property you already own and have a mortgage on. The new mortgage takes the place of the mortgage you originally had on the property.

Who May Want to Remortgage?

You may want to remortgage if:
  • The introductory deal on your current mortgage is due to end soon andyou’d like to avoid being transferred onto your lender’s SVR (standard variable rate)
  • You want to consolidate multiple other debts
  • You need money to fund home improvements
  • You have a large expense coming up – like a wedding or school fees, or you want to help your children with a deposit, etc.
Remortgaging may be unsuitable for you if:
  • You need a small mortgage below £25,000
  • You need to borrow a very high percentage of your property’s value
  • You took out your current mortgage very recently
  • Your mortgage has high ERCs (early repayment charges)

What does remortgage mean?

Remortgaging is the process of switching from one mortgage lender to another but staying in the same property. The most common time to remortgage is when your current product has come to its end.

Why Remortgage?

In today’s competitive market, many borrowers choose to switch their mortgage every few years to take advantage of the new rates on offer. Those that remain on their lender’s SVR (standard variable rate) after their initial product ended could lose out on a range of potential benefits, not least the opportunity to reduce their monthly payments, which could be a significant margin in some cases.
We’ve listed some of the main reasons why people remortgage below.
To Raise Money
Higher income or a rise in your property’s value means you could remortgage and raise more money to help pay for major outgoings, like home improvements, a wedding or your child’s university costs. This could save you from needing a separate loan.
To Save Money
Remortgaging can help you save money if your fixed rate or deal is about to end. Rather than go onto your lender’s SVR, which is normally significantly higher than their introductory rates, you can change lenders and take out a new deal.
However, before you steam ahead and remortgage, you may want to consider contacting your current lender first. If you’re on a fixed or discounted rate, your lender will usually write to you a few months before it ends and you’re transferred onto their SVR. They’ll ask you to contact them or your broker about your options. Your lender will want you to remain as a borrower with them, so they’ll give you the opportunity to choose from better rates they offer to existing customers – these are often not the same as the products offered to new customers. This could help you save money on your monthly repayments or repay your mortgage sooner.
In the case that your lender doesn’t have decent or suitable deals on offer, you should consider remortgaging and switching your mortgage to another lender. However, before you make any final decisions, you may want to speak to a mortgage broker. We can help you compare deals.
To Consolidate Your Debts
Remortgaging can allow you to consolidate other debts, like car loans or credit card balances. You release some of the equity in your home and remortgage for a higher amount, then you use the additional money to pay off your other debts, consolidating them all into one – your new, larger mortgage.
We recommend that you think carefully before remortgaging to pay off your current debts. It can help you organise what you owe and meet payment deadlines, however mortgages are over longer periods of time than credit cards and personal loans so you may end up paying more overall, despite the fact they usually come with much lower interest rates.
Nonetheless, sometimes it really could be the best option. It’s important to seek advice before you commit to consolidating your debt. You’ll need to make sure that you can keep up with the repayments, otherwise you risk the repossession of your home.
To Avoiding Moving Home
You can remortgage your house to raise the funds for improvements. Remortgaging can be a convenient way to fund an extension, upgrade the kitchen or install a second bathroom. That way, you don’t have to uproot your lives and move to accommodate changing needs within the family.

When Can You Remortgage?

When you take out a new mortgage, you’re normally offered an introductory deal – a reduced rate for a set period and certain freebies, like a free legal service or valuation. Introductory deals can range in length, then once the deal ends, you’re moved onto that lender’s SVR. Their SVR is usually much higher than their introductory rates.
You can start to organise your next mortgage up to 6 months before the end of your existing rate. Mortgage offers can take 3 – 4 weeks to process and the legal work can take 2 – 3 weeks. The new mortgage offer itself is often valid for up to 6 months so, if everything is completed and ready to go early, you can instruct the solicitor to wait until any early repayment charge period with your current lender has expired before proceeding. It’s often worth looking for better rates prior to your current deal finishing, otherwise you could end up paying more than you need to – specifically if the new mortgage isn’t ready to go when your current deal ends and you’re moved onto your lender’s SVR.