As you get closer to the completion of your fixed term, it is time to start thinking about remortgaging.
Most people kick-start their remortgaging process approximately three months before their current deal expires. But what happens if you spot a deal that has a better rate and you want to initiate the process sooner? Can you remortgage early?
Looking at an Early Remortgage in Manchester?
Yes, you typically can remortgage early. However, the feasibility of being able to remortgage early varies with lenders and the type of product you have taken out.
Prior to jumping the gun, carefully weigh the pros and cons of remortgaging early in Manchester.
Why Remortgage Early in Manchester?
The reasons for opting for an early remortgage are varied. They range from securing better deals, funding home improvements, consolidating debt and to protect against interest spikes.
Generally, an early remortgage in Manchester is initiated within the last 3-6 months of the current mortgage term.
Frequent Scenarios for Remortgaging Early
Avoiding Lender’s SVR
This is the most common reason for remortgaging. To evade an increase in payments from your lender’s SVR, it may be practical to remortgage.
Searching for a Better Deal
If you stumble upon a more favourable deal before your term expires, opting for an early remortgage could ensure you seize the deal.
Funding Home Improvements
Sometimes, homeowners remortgage early to finance renovations. They hope to combine the operating costs with their mortgage.
Understanding the Different Mortgage Types
When securing a mortgage, you are typically given three options: fixed-rate, tracker, and discount-rate mortgages.
Other specific options like interest-only deals are available, but these three are the most common.
Some mortgage products will allow you to remortgage early and others won’t.
Fixed-rate Mortgages
These are straightforward. Your interest rate and consequently, your monthly mortgage payments, remain static until the end of your fixed mortgage term.
Once this term lapses, you automatically switch to the lender’s standard variable rate (SVR), which generally is higher than your previous rate.
Usually, we find that you can remortgage early with these types of products, however, you will face an early repayment charge for doing so.
Tracker Mortgages
These mortgages calculate your payments based on your interest rate plus the Bank of England’s base rate. Because the base rate can fluctuate, your payments might differ monthly.
It may be possible to remortgage early in Manchester on these types of products, it is worth checking with your mortgage lender or a mortgage advisor in Manchester.
Discount Rate Mortgages
These mortgages keep track of a rate determined by your lender. However, it’s crucial to note that the rate can sway any time at the lender’s discretion.
Again, you should check whether you can remortgage early with this type of product. You may be able to depending on the time left on your product.
What are Early Repayment Charges (ERCs)?
ERCs might dissuade remortgaging early in Manchester. The cost of ERCs can increase the earlier you initiate the process within your term.
Nonetheless, switching mortgage products could also save you significant amounts in the long run, most notably if you are remortgaging to avoid interest rate hikes.
Always speak with your mortgage lender or mortgage broker in Manchester to determine your potential ERCs and ascertain if early remortgage would be suitable for you.
How to Start an Early Remortgage Process in Manchester
You can initiate your remortgage process by having a free remortgage review with one of our mortgage advisors in Manchester.
Our mortgage advisors in Manchester stand ready to guide you in finding the most fitting product for your remortgage in Manchester.
Date Last Edited: November 8, 2024
