Your mortgage is likely to be your single biggest monthly expense so we all want to get the best deal we can. 

Remortgaging or switching your mortgage can mean that you can benefit from a better mortgage rate than you are on currently, saving you money.

You may also wish to release some equity in your mortgage for home improvements, or to raise capital to buy property or help a dependent relative to get on the property ladder.

MortgageOne can help you to remortgage. Our focussed mortgage department has a specialist, dedicated mortgage team ready to help you remortgage your home.Our commitment is to you, our client, and we are independent and impartial in offering you the best advice for you and your situation.

remortgaging

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What is remortgaging?

Remortgaging or switching your mortgage means applying to your current lender, or applying to a new mortgage lender for a new mortgage to pay off your current mortgage.

Remortgaging or switching your mortgage is generally taken to mean taking out a new mortgage on your existing home, rather than a home mover mortgage intended to purchase a new property.

There are several reasons why you might consider remortgaging but, essentially, you will most likely be remortgaging or switching lenders to either get a better interest rate which should mean lower repayments or to borrow a higher amount to release equity in your home.

Secure Lower Rates

Our team will help you switch your mortgage to more attractive rates, reducing your monthly repayments

Considering a remortgage?

There are benefits to remortgaging your home as you may be able to get a better deal than you were eligible for when you first took out the mortgage. 

You will also find that the mortgage landscape changes over time in response to changes in the mortgage market, changes in interest rates, and changes in your own circumstances such as your income and/ or the value of your property.

Here are some reasons for remortgaging:

The value of your home may have increased substantially over time, especially if you bought your home following the house prices crash in the late noughties and early 2010’s. Since the pandemic, house prices have risen considerably again.

This may mean that the loan to value percentage has decreased (as your loan balance will be lower compared to the house’s value) since you bought your home. Lenders may offer you a more favourable rate based on an updated, lower LTV percentage.

If the value of your home has risen, and you have been steadily paying off your mortgage over a number of years, you will have built up equity in your home.

This means that there is a difference between the value of your home and the amount you owe on your mortgage. If you wish to borrow more money against your property to finance home improvements, pay educational expenses, or medical expenses for example then you may wish to ‘top up’ your current mortgage or remortgage.

In the same way as you might use the equity in your home, for home improvements for example, remortgaging can raise capital. If your current lender has declined this or you wish to get a better rate, you may remortgage.

You may wish to use the money for an investment property or to consolidate your debts. You will usually have to show proof to your lender of how you will use the money, and your income and affordability will be taken into account.

If your fixed rate period is ending, you may be moved to your lender’s standard variable rate, which may be higher than your fixed rate and thus mean more expensive repayments. 

It can be a good time to either approach your current lender or shop around to find a new mortgage lender, in order to get a lower interest rate.

You may have inherited some money, saved additional funds, or received a bonus at work, or for another reason you may wish to overpay your mortgage.

Overpaying your mortgage means that you pay more than your regular monthly mortgage payment, either regularly or in lump sums. Overpaying your mortgage can mean that you pay less interest and you may be able to pay your mortgage off earlier.

However, not all lenders will allow you to overpay your mortgage, especially with fixed rate mortgages. If your lender does not allow overpayments, you may wish to consider switching to another mortgage lender.

The best deals on mortgages change over time, as do interest rates. Interest rates in the Eurozone are set by the European Central Bank and these interest rates change regularly.

Your mortgage lender may not pass on lower interest rates to their standard variable rate mortgage customers (apart from tracker mortgages which are tied to ECB interest rates). 

Long term fixed rate mortgages may also offer better rates than the short term deals offered in the past. Fixed rate mortgages offer financial certainty and, with interest rates expected to rise, fixed rates may be lower than standard variable rates.

Can you save money by remortgaging?

Yes, you can potentially save thousands by switching your mortgage. Recent research has suggested that you could save at least €5,000 by switching your mortgage to another lender.

You can benefit from a lower mortgage rate, and you could also benefit from repaying the new mortgage over a longer term, lowering your repayments.

If you are considering switching your mortgage, there are a couple of points you may wish to consider, though. 

Firstly, if you are on a fixed rate especially, there may be fees or penalties associated with switching your mortgage so it is important to ensure that any potential savings outweigh these.

Also, you must bear in mind that your new lender will consider a mortgage application based on affordability, and will take your income, your outgoings, your savings, and the value of the property into account. Central Bank rules mean that you may have to have a minimum loan to value of 80% and be limited to 3.5 times your salary in any borrowings.

How to compare mortgage deals

Before you consider remortgaging, you will need to know certain details about your current mortgage in order to compare with any new mortgage deal. 

Here are the details you will need to know:

You will need to know the amount outstanding on your current mortgage. You may wish to ‘top up’ your mortgage or switch your existing balance to another lender. Use our mortgage calculator to see how much you may be eligible to borrow.

You will need to know your current remaining mortgage term. You may wish to continue with this term or you may increase the term for lower repayments, or decrease the term and pay off your mortgage quicker, or choose a mortgage with more flexibility than your current lender allows.

You will need an up to date valuation on your home to calculate LTV. Equity is the difference between the market value of your home and the outstanding balance on your mortgage. 

If you wish to raise capital or release equity on your home, or you wish to benefit from lower mortgage rates due to the lower LTV, you will need to know the LTV of your home.

Negative equity occurs where the mortgage balance is higher than the current value of your home. In the late noughties and into the early 2010’s borrowers who had high LTV or 100% mortgages found themselves in negative equity. Needless to say, you will be unlikely to be able to remortgage if your home is in negative equity.

Your lender will need to see evidence of your earnings, any other debts you have, your outgoings, your savings, your credit history, and the value of your property to proceed with your remortgage application.

The Central Bank loan to income rules mean that you will usually be allowed to borrow 3.5% of your earnings. Use our mortgage calculator to see how much you could borrow.

Let’s Get Started

Our team will help you switch your mortgage to more attractive rates, reducing your monthly repayments

Where do I start if I want to remortgage my home?

Working with a Qualified Financial Advisor will help you to get the best deal in switching your mortgage. MortgageOne will always give you impartial advice that is in your best interests, we are independent and are not tied to any one lender.

Remortgage savings calculator

Use the MortgageOne loan calculator to estimate how much you could borrow depending on your current mortgage balance and term, property value, and your income.

You can also input your details and the details of your mortgage and see how much you could save on your repayments.

Remortgage Application

If you are switching to another lender, similar to when you first applied for the mortgage, you will first apply for a mortgage in principle, and then you will complete a full mortgage application.

You will need a current valuation of your property, and you will need a solicitor to handle the legal aspects of the remortgage, especially if you switch to another lender. Some lenders will offer cash back or incentives to new customers which may help with these costs.

You may also need to review your mortgage protection insurance to ensure that you are adequately protected and getting the best deal.

Learn more about remortgaging

Find out if you could qualify for a lower mortgage rate and benefit from lower repayments today.

Even if your credit history was not ideal in the past, if you have previously been turned down for credit, or if your situation is off standard, you may still be able to remortgage or switch your mortgage if you are working with an established mortgage broker.

Use our mortgage calculator or call us to a Qualified Financial Advisor about remortgaging your home or switching your mortgage provider.