What is Remortgaging?
Remortgaging is when you move to a new lender, without moving home. Remortgaging is not the same as changing to a new product with your existing lender. If you already have your mortgage with us and are looking for a new mortgage product please view our rate switching guide.
Remortgaging could save you money
We may be able to offer you a lower interest rate compared to what you are already paying, which could reduce your monthly repayments, giving you that bit extra for little treats. You can compare our rates by looking at the APRC, you can also use this to compare your current mortgage with what we have to offer. Remember there are other costs involved when remortgaging, you should take these into consideration to decide if you are actually saving.
Remortgaging for a better interest rate
Many borrowers will look to remortgage at the end of their product term, in order to obtain a better interest rate. This can be an easy way to save money on your mortgage, and pay your mortgage off sooner. Through paying less interest, you may be able to lower your overall mortgage term, meaning you will be mortgage free quicker.
Pay your mortgage off earlier
If you move to a cheaper rate with us, you may be able to afford to reduce the overall term of your mortgage while keeping your monthly repayments the same, leaving you with more money for the future.
Raise money by remortgaging
You may want to raise some extra funds for home improvements. Remortgaging to us can allow you to raise funds by releasing some of the equity you have in your home.
Remortgaging for more flexibility
You may wish to move lender to gain more flexibility in your mortgage. Different lenders and different mortgage products will allow varying amounts of flexibility. This may be to allow you to make regular overpayments on your mortgage or due to your circumstances changing since you joined your lender.
Some lenders also offer offset mortgages, which allows you to offset interest from your savings against your mortgage. Put simply, instead of earning interest on your savings, you will reduce the amount of interest you pay on your mortgage. Please note, we do not offer offset mortgages at The Tipton.
When to consider remortgaging
You can remortgage at any point, however it may make more sense to wait for certain times during your mortgage. While your mortgage term can range up to 35 years, you will have a series of mortgage products during this time. Each of your products will expire at set points, these range between products for two years all the way up to ten year mortgage products. While you are tied into a mortgage product, remortgaging may be more costly as many lenders will include early repayment charges. This means that if you remortgage away or overpay a large amount during the product term you are likely to incur a fee. That is why remortgaging may be cheaper when your mortgage product comes to an end.
Costs of Remortgaging
Although remortgaging may save you money on your monthly repayments, it is important to consider other related costs so you know if you are actually getting a better deal.
Early Repayment Charges (ERC)
This is a charge you may incur if you pay off your mortgage during the existing product term. If you were to remortgage at the end of the product term, you are unlikely to be liable to pay an ERC. You should check with your current lender to be sure what ERC’s you may experience when remortgaging. These fees change from lender to lender. Here at The Tipton, our standard fee structure is 1% for each year remaining on the product term (e.g. 1 year remaining would be a 1% charge and 2 years remaining would be a 2% charge).
These include a range of fees that your current lender may charge to release your property deeds to your legal representative. These fees are set by each lender individually, our overall exit fees are £125.
Your new remortgage product may have product fees associated. Product fees are often the most expensive part of remortgaging, however some lenders will allow you to add certain fees to the mortgage amount which could reduce the burden. If you are considering adding product fees to your mortgage amount, it is important to remember that you will be changed interest on them at the same rate as the mortgage.
All lenders must complete a property valuation to ensure the property value will cover the amount you are borrowing. Many of our remortgage products offer a contribution towards the cost of a valuation.
Types of mortgages
We offer a range of mortgages to suit your needs. Our main types of mortgages are described below.
Fixed rate mortgages
These mortgages offer a fixed interest rate for the term of the product, meaning your monthly repayments will remain the same even if our Standard Variable Rate (SVR) increases.
Discount rate mortgages
These mortgages offer a discount from our SVR, meaning the rate and your monthly repayments can increase or decrease with changes to our SVR.
What you’ll need
Here at the Tipton we want to make the process of remortgaging as easy as possible. Because of this you can book an appointment with us face to face or over the phone. To book an appointment you can complete our online form, call us on 0121 557 2551 or visit one of our branches.
When you apply for your remortgage with us, we’ll ask you to bring a few documents with you:
- Last three months payslips (or last two years SA302’s or Limited Company Accounts if you’re self-employed);
- Your accountants details (if self-employed);
- Latest three months salary fed bank statements;
- Your most recent P60;
- Employers contact details;
- Proof of any other income;
- Proof of your name and address;
- Full details of any outgoings.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.