Things to Consider When Remortgaging

If you have decided that remortgaging your home may be the best option for you, there are a number of things you need to think about when you start to search for your ideal new mortgage. Read our guide below to discover how remortgaging works, and find out what you need to think about before making a final decision, so you can be sure that a remortgage is the right option for you.

When can I remortgage my house?

Before you decide to proceed with a remortgage, it's crucial that you read and understand the terms and conditions of your current mortgage deal. Some mortgages include an Early Repayment Charge, which means that if you wish to pay off your mortgage early, there could be a charge for doing so - typically a percentage of the amount that you are paying off.

You need to get all your documentation together to check what charges apply - if your current mortgage is with Newcastle Building Society you will find this on either your Key Facts Illustration (KFI) provided after your mortgage appointment, or on your mortgage offer document that we issued to you after we processed your application.

When you have this information, you'll be able to calculate whether it's worth leaving your current mortgage early and paying the Early Repayment Charge. Alternatively, you may wish to avoid the charge by remortgaging when your current mortgage deal has come to an end.

You should also be aware of any other charges that may apply, such as redemption charges, or a deeds release fee.

Find out how much you owe your current lender

It's important that you know how much you have left to repay on your current mortgage before you start to research remortgage options. This will enable you to budget, as well as understand how much you need to remortgage for, including any additional costs such as legal, valuation and administration fees.

You can request this information from your current lender. Simply give them a specific date of when you would like to redeem your mortgage, and they will give you an exact figure; this will ensure that you do not take out more or less than you need to. If you're thinking of remortgaging to Newcastle Building Society, our mortgage affordability calculator will help to give you an idea of how much you could borrow before you speak to one of our mortgage advisers.

Understand what you want from your new mortgage deal

There are several reasons why you may be considering a remortgage - it could be that you are looking for more flexibility to suit your current circumstances and wish to make overpayments; or you may be concerned about interest rate changes and wish to fix the rate on your mortgage.

Whatever your reasons for remortgaging, there are thousands of mortgage deals out there that each offer different features and benefits. We recommend that when you are looking at new mortgage deals, don't just compare the interest rates - look at the whole package including the fees, as it may be cheaper to go for a product with no fees rather than one with lower interest rates.

You can compare all of our mortgages here; however the main ones for you to consider are:

Variable rate mortgages

The interest you pay on a variable rate mortgage can vary, depending on the interest rates that the mortgage lender dictates. This could go up as well as down, and a lender can change their variable rate at any time.

Fixed rate mortgages

On a fixed rate mortgage, the rate of interest stays fixed until a set date, meaning that your monthly repayments remain the same throughout the period - no matter what happens to interest rates in general. The advantage of a fixed rate mortgage is that you know exactly how much you will have to pay each month, so you can budget your monthly outgoings more easily.

Base rate tracker mortgages

Like variable rate mortgages, the interest rate on base rate tracker mortgages can go up as well as down; however they are instead linked to the Bank of England base rate. They 'track' the rate by a certain percentage, which is usually above the Bank of England base rate - if the rate increases, so will your interest payment, or if the base rate falls, you will benefit from a reduction in your monthly repayments.

Discount mortgages

A discount mortgage comes with an initial discounted period, which means that you pay a lower rate initially before the rate increases to an agreed rate. It's important to note that the new rate could go up as well as down, as these mortgages are usually linked to the lender's Standard Variable Rate.

Offset mortgages

An offset mortgage combines a traditional mortgage with any deposit accounts, such as savings and/or a current account, so you can offset your savings against the value of your mortgage balance. This offsetting could save you thousands of pounds and reduce the term of your mortgage. An an example, if you had a mortgage of £100,000 and savings of £50,000, you'd only pay interest on the £50,000 of the mortgage balance.

Please note that Newcastle Building Society does not currently offer offset mortgages.

Not all mortgage products are available for remortgaging, and each one will differ in fees and Loan to Value. You may be looking on mortgage comparison sites whilst researching your remortgage, however you won't get all the same results, so before you make a decision we recommend that you look at several sites and speak to different mortgage providers such as banks, building societies, or independent mortgage advisers.

It is also worth speaking with your current provider to see what deals they could offer you, as it may be simpler and cheaper to switch your mortgage to one of their products than to go elsewhere.

Should you have any more questions about the process of remortgaging, take a look at our remortgaging frequently asked questions page to see if we have the answer there for you. If you need anything about remortgaging to be explained further, one of our qualified mortgage advisers will be happy to help. Call us now on on 0345 606 4488, or book an appointment at your local branch.

Your mortgage will be secured on your home. Your home may be repossessed if you do not keep up repayments on your mortgage.