Re-mortgaging Explained

There are many reasons that you may want to re-mortgage your home. Many of us are attracted by fixed-term mortgages. When the fixed term comes to the end you may want to look for a better deal in the market rather than stay with your existing lender, if it makes financial sense to do so.


You may simply want to reduce your monthly mortgage costs – by finding a lower interest rate or by extending the term of your existing mortgage, or both. Life has a habit of changing quickly sometimes – you may want to access some of the cash tied up in your home and use this to invest in other properties.

It may be that your circumstances have improved and you may qualify for a better deal in terms of interest rate or greater flexibility such as payment holidays options, or the ability to make over payments for example.

Don’t forget! The stamp duty holiday is coming to an end!

During the Coronavirus pandemic, the government has increased the threshold at which stamp duty is paid on property sales from £125,000 to £500,000. But this increase won’t be around forever! You have until 30th June 2021 to save on the first £500,000 of your property, after which the scheme tapers back down to £125,000 by the end  of September. Make sure you allow enough time to complete the purchase of your dream home and reap the benefits.  Give us a call today to see how we can help you get the right deal.

Whatever the reason you’re looking to re-mortgage your home, we can help you understand your choices and help you secure the right deal for you. One of the most important things to remember is that we work for you, not the lender. We can offer you a clear understanding of the whole process and whether any Government schemes are available to assist you in buying your property.

What types of mortgages are there?

Fixed rate mortgages

A fixed-rate mortgage is a home loan where your interest rate is guaranteed to stay the same for a set period of time, giving you peace of mind because you know exactly how much your payments will be every month.

Variable rate mortgages: Tracker mortgages

In short, a tracker mortgage is a home loan where your interest rate will ‘track’ the Bank of England’s base rate, plus a set percentage. This can mean your payments will reduce as the interest rate reduces, but it can also mean they increase too.

The base rate is currently at a record low of just 0.1%, due to changes caused by the COVID19 pandemic. So, if the interest rate on a tracker mortgage was the base rate +1%, the amount of interest you would pay is 1.1%. If the base rate went up, the interest rate on your tracker mortgage would also rise.

Variable rate mortgages:
Discount mortgages

With a discount mortgage you pay the lender’s standard variable rate, with a fixed amount discounted. For example, if your lender’s standard variable rate was 5% and you had a 1.5% discount, you’d pay 3.5%.

Repayment mortgages

A repayment mortgage means as long as you meet all your payments every month, you will be repaying off part of your capital (the money you borrowed) and part of the interest rate. At the end of your mortgage term the property will be fully repaid and will be fully owned by yourselves.

Interest-only mortgages

Unlike a repayment mortgage, you only pay off the interest portion of your loan. This means you have to make sure that at the end of your mortgage term you have enough money saved to pay off the outstanding capital in one lump-sum in order to complete your mortgage agreement and own your home.

Try our mortgage calculator to get an idea of what you could borrow. No credit checks required.