Is Now the Right Time to Remortgage Your Home and Save Money?

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In August, searches for remortgaging surged by 15.6%, even as the overall mortgage search volumes fell to their lowest levels since mid-2024. This shift raises an important question: why are more people considering remortgaging now, and is it the right choice for you? With the current economic landscape, understanding your options is critical.

Why Remortgaging Is on the Rise

Rising Interest Rates

Even with a cut to the Bank of England base rate earlier this summer, mortgage rates remain near 5%. Homeowners are feeling the pressure to secure a more favorable deal before rates rise again.

Fixed Deals Ending

As ultra-low fixed-rate mortgages reach their expiration, homeowners face the risk of transitioning to higher standard variable rates. With the average monthly payment increasing by around £300 for those on variable rates, it’s no surprise so many are exploring their remortgaging options. For example, a homeowner currently paying £800 per month may see their payment jump to £1,100 if they move to a higher rate.

Household Budget Pressures

The persistent rise in the cost of living is pushing homeowners to explore remortgaging as a way to ease their financial load. A study by the Office for National Statistics revealed that essential costs, including food and energy, increased by 8.2% over the last year. This has led many to search for lower monthly payments or fixed rates to gain stability, making remortgaging an appealing option.

Benefits of Remortgaging

Save Money

Even a modest reduction of just 0.5% in your interest rate can translate into significant savings. For example, the annual payment difference for a £200,000 mortgage can reach up to £1,000. By remortgaging, many homeowners are capitalizing on better rates that lower their overall mortgage costs.

Peace of Mind

Securing a fixed rate ensures predictable monthly payments. This stability allows homeowners to better manage their monthly budgets, especially during uncertain economic times. Knowing exactly what you'll pay each month can provide peace of mind, aiding in financial planning and reducing stress.

Flexibility

Remortgaging offers flexibility that some homeowners find invaluable. Whether it’s consolidating debts or releasing equity for home improvements, the options are varied. For instance, a homeowner might choose to remortgage to access £20,000 in equity to fund a new kitchen, increasing both comfort and property value.

What You Should Do Next

Check Your Current Deal

Start by reviewing when your current mortgage ends and what your lender’s standard variable rate will be. Knowing your current mortgage terms is essential for recognizing whether remortgaging makes sense for you.

Plan Ahead

Don’t wait until the last minute. You can lock in a new rate up to six months before your current deal concludes. This foresight can help you secure a favorable rate and avoid unnecessary stress as your deal draws to a close.

Speak to a Broker

Consider consulting with a mortgage broker. At Bay Mortgages, we assist clients in navigating the market to uncover competitive remortgaging options. A professional's insights can help you make informed decisions tailored to your financial situation.

If your fixed-rate deal is ending soon, now is the time to review your options. Get in touch with Bay Mortgages today for tailored advice by either calling 01202 110 304 or emailing in to info@baymortgages.co.uk