Weigh up the pros and cons and Let Us Help You to Remortgage.
Caz Blake-Symes • June 22, 2020
Is this a good time for you to Remortgage – Part 2?
Adapted from a Money Expert article
Remortgaging needs careful thought
Around a third of all home loans made in the UK are actually remortgages. For most people, their mortgage is their biggest financial commitment. And it follows that streamlining the largest debt can produce the largest saving - sometimes £1,000s each year. If you're the kind of person who shops around to get the cheapest television or mobile phone contract, then you're missing a trick by not using the same skills to save money on your mortgage.
But there are pros and cons to remortgaging. In this article we look the reasons why it might not be wise to remortgage.
Why shouldn't I remortgage?
Your mortgage debt is really small.
Once your loan falls below a certain amount – say around £50,000 – it may not be worth switching lender simply because you are less likely to make a saving if the fees are high. In fact, some lenders won't even take on mortgages below £25,000. Do have a look but you'll probably want to look at rates with a small fee, or no fee at all. The smaller your mortgage, the worse the effect of any fees you need to pay. Quite often, you'll be better remaining on the higher interest rate.
Your early repayment charge is large.
A large early repayment charge could mean that it'd be utter foolishness to move before the end of the incentive period. If it would cost too much to free yourself from your current deal, then it's all the more important that you do your homework and be ready to move as soon as you can. It's always worth asking your current lender to let you switch to another of its deals (ie, do a product transfer) by paying a reduced early repayment charge. You're unlikely to get to move to its top-of-the range deal but as long as it's better than the one you're currently on, and doesn't lock you in for much longer, you have nothing to lose.
Your circumstances have changed.
It's possible that your financial position has altered since you took out your current mortgage - for instance, one of you has stopped working or you have become self-employed. Stricter mortgage rules introduced in April 2014 mean lenders MUST now see evidence of your income. New lenders may not be prepared to offer you a loan because you no longer fit their criteria, meaning you may have to stay where you are.
Your home's value has dropped.
You may have had a 10% deposit when you bought your home and got a decent mortgage, borrowing the remaining 90% of your home’s value. But now, your house price has dropped and the amount you owe is a bigger proportion. Unfortunately, you're a victim of evaporating equity, even if you have been making repayments, and that can hurt you. In some cases, you may be in negative equity, where your debt is higher than the value of the property. The only thing you can do is sit tight, make over-payments whenever you can afford it as long as you won't be charged fees as well, and wait for prices in your area to go up again.
You have very little equity.
If you need to borrow more than 90% of the value of your property – then you'll often find it difficult to find a better rate. Although at the time of writing, there are more mortgages at 95% than we have seen for a long time so it's worth checking to see if it's worth switching. Don't forget to check if your current lender charges an early repayment charge to leave.
You've had credit problems since taking out your last mortgage.
Since the credit crunch, lenders have become much pickier about who they lend to. The regulator, the Financial Conduct Authority, now also requires them to carefully check the mortgage is affordable, not just at current rates, but at a higher rate too, to ensure you could cope if interest rates were to rise. As a result, lenders will want a lot of detail about your outgoings and are looking for spotless repayment histories or at least a good, clean record of handling debts well. It might only take one recently missed payment to your credit card, loan, mortgage, utility company...even your mobile phone to scupper your chances. Check your credit file to be sure.
You're already on a great rate.
You may be already on such a fantastic deal that you'd be mad to move. But don't get too comfortable – chances are it won't always be top of the tree so eventually you'll need to consider hopping onboard the remortgaging merry-go-round.
For further details and to book your FREE CONSULTATION with one of our expert Mortgage Advisers please contact us
Bristol Mortgages Online www.bristolmortgagesonline.com Tel 0117 325 1511
Bath Mortgages Online www.bathmortgagesonline.com Tel 01225 584 888
Exeter Mortgages Online www.exetermortgagesonline.com Tel 01392 690 888
Email info@swmortgages.com
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Here at Bristol, Bath and Exeter Mortgages Online, we are delighted to take on a CHALLENGE!
Being a trading style of Manor Mortgages, who have access to Lenders and Products that are beyond the reach of the majority of Mortgage Brokers.
Here at Bristol, Bath and Exeter Mortgages Online, we aim to give you a stress-free mortgage application process.
From when we send you our initial links and forms through to completion, we will support you along the way.
Here is a guide which we hope will enable you to understand and prepare for the documentation and
More sales, rising supply, plenty of demand and modest house price growth shape a steady UK housing market in June 2025.
The average house price in the UK is £268,400 as of May 2025 (published June 2025). This is a rise of 1.4% or £3,690 over the past year.
We are thrilled to be celebrating our 17th Anniversary this week.
Phillip Clark founded Bristol Mortgages Online in 2008.
Lower mortgage rates are supporting more house sales against a backdrop of modest house price inflation. Zoopla’s House Price Index tracks key trends in the UK housing market - here’s the latest news in May 2025.
This Edition Includes..
Helping Your Family Onto The Property Ladder
What will happen to Interest Rates This Year?
Easing Stress Testing?
Looking to Remortgage?
Getting a Mortgage with Adverse Credit
Plus lots more…
Mortgage rates are likely to stay in the 4-5% range this year while changes to affordability testing by lenders could give buyers a boost.
Sky high house prices, high cost of living, student loans and rising rent costs mean that getting on the property ladder is challenging. But the desire to own a home remains strong for many young adults.
Now, the affectionately known ‘bank of mum and dad’ (or bank of other family members) may wish to lend or give money for deposits and other house purchase costs. Our expert Mortgage Advisers will be able to discuss all options available to suit your specific family’s situation.
The Bank of England has voted to reduce the Base Rate by 0.25% for the second time this year, taking it to 4.25%. Base Rate was held at 4.5% in March after it was cut by 0.25% in February.
Adapted from Zoopla’s April 2025 Housing report I mage: The analysis uses average house prices from the house price index and for first-time buyers to assess mortgage payments at different mortgage rates applied to a 30- year mortgage, at different loan-to-values. One emerging trend that we expect to positively support market activity in the coming months is a relaxation in how lenders assess the affordability of new mortgages. While buyers focus on the mortgage rate they will pay, lenders also check whether the borrower can afford a 'stressed mortgage rate' at a higher level than the borrower will pay. While the average 5-year fixed rate mortgage is around 4.5% today, many lenders are currently 'stress testing' affordability at 8-9%. This makes it harder to secure a mortgage without a large deposit. If average mortgage stress rates were to return to pre-2022 levels of 6.5% to 7%, this would deliver a 15-20% boost to buying power. An average first-time buyer with mortgage repayments of £1,020pcm at a 4.5% mortgage rate would typically have to prove they could afford monthly repayments of £1,550pcm at an 8.5% stress rate. If the stress testing is relaxed to 6.5%, repayments would fall to £1,275pcm, boosting buying power. It's a similar pattern for the average homeowner, while the actual impact will vary by lender and type of borrower. This change would consequently supporting demand and sales volumes, helping to clear the stock of homes for sale, rather than boosting house prices. Other existing rules and regulations that remain in place will continue to impact the availability of mortgage finance. Comment from Phil Clark “This is potentially very exciting news and will give borrowers a greater choice of products if these rules are relaxed. Regardless of whether you are a First-time Buyer, Looking to move, remortgage or invest in property, there are a huge range of competitive mortgage deals on the market. I will be delighted to discuss your specific requirements and offer you the most suitable deal!” Please call Phil on 0117 3251511 or email info@swmortgages.com For more information about the Mortgage and Protection products we offer, please visit www.bristolmortgagesonline.com Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.