How Early Should You Plan a Remortgage?

When it comes to remortgaging in the current environment, there is one rule: move fast, so you don’t miss the boat. Interest rates are rising, and they will continue to do so, with some reports suggesting that the UK base rate will sit at 5.8% by next year (more than double the current 2.25%), which means that mortgages will only get more expensive.  

As interest rates rise, having the most competitive mortgage on the market is vital for keeping your household spending to a minimum. No one should be paying more for a mortgage than is absolutely necessary, especially in light of inflation, energy costs, and the current economic instability as markets respond to the government’s borrowing plan to support last week’s mini-budget announcement.  

Remortgaging shouldn’t only be a consideration if you’re on a variable rate. We suggest that anyone with a fixed mortgage with a term of eighteen months or less should explore the remortgaging options now. In some cases, breaking your present mortgage and locking in current rates will be more advantageous than waiting until your term ends and gambling on interest rates at that moment in time.  

How early should you remortgage? What to know:

• Lenders are changing mortgage rates from month to month (and sometimes week to week). Many lenders are also withdrawing mortgage products from the market. Move now to secure the best deal possible
• We expect that today’s best mortgage products and rates will seem cheap in as little as six months – time is money
• Remortagaging can take up to eight months to arrange, so move well ahead of time – every day counts
• Even if you are on a fixed rate for some time still, we can run cost comparisons to see if it makes sense and is cheaper to remortgage now: we can provide a breakdown of potential savings and costs
• Don’t wait too late to remortgage if you are coming to the end of a fixed-rate mortgage – start the process at least eight months (ideally more) ahead of your term ending
• Think long-term: some 5-year fixed rates are currently cheaper than 2-year fixed products. We can give you a breakdown of what will be the most competitive product for you and your options, so you can look at all the possibilities to see what’s the best fit
• Remortgaging offers are usually valid for six months, so you can lock in today’s rates and draw down funds later

Timeline: think at least eight months out

Anyone with a variable rate that wants to remortgage should move as fast as possible to lock in current rates quickly and secure the best deals available. 

However, we also recommend that you start thinking about remortgaging at least eight months ahead of your current fixed rate or mortgage product ending. We can pitch the terms to lenders and lock in current rates as quickly as possible. The application process can take up to two months, so it will pay to get ahead of the game. Mortgage terms are valid for six months, and you will be able to secure current rates before more base rate increases, drawing down funds at the end of your current term.

Contact us to run a cost comparison – whatever your current term or product

Explore remortgaging ahead of time, even if you are on a fixed rate for the next eighteen months or so. You don’t have to take immediate action to remortgage, but knowing what you’re likely to pay later versus what it will cost you to remortgage now will mean you can make an informed decision about timing. 

If you currently have a fixed rate, we can run a cost comparison for you, including taking into consideration any early repayment fees and so on. This cost comparison will be invaluable because you’ll have a breakdown of what it is likely to cost you to remortgage at the end of your fixed rate or if it makes sense to remortgage now, locking in current rates.

Rates are rising exceptionally fast – get ahead

The Bank of England is raising the base rate quickly in a bid to strengthen the pound and battle inflation. As a result, mortgage rates are continually changing. As we saw last week, some lenders are even raising their mortgage rates before the Bank of England announces a base rate increase, so there’s less and less time to secure the best deals. Don’t wait until just before the Bank of England Monetary Policy meetings to make a move to explore refinancing – lenders are ahead of the game, and you should be too. 

We’re also in an environment where the Bank of England may make emergency steps and raise the base rate outside of its planned policy meetings, so don’t try and anticipate raises in line with scheduled updates: you’ll be too late to get the best offers. The sooner you contact us to explore refinancing, the sooner we can pitch terms to lenders, lock in rates and get the validation process started – every day counts.

Access the best products quickly – in case they’re withdrawn

In the context of the falling pound and more base rate hikes on the horizon, lenders are withdrawing mortgage products from the market. They’re doing this as they look to manage the volume of remortgaging requests, perform stress testing and secure their margins ahead of future rate rises. 

Lenders have been steadily withdrawing products from the market in recent months, and we expect more may follow. However, lenders usually honour any offers they’ve made, even if they later withdraw the product from the market. Again, moving quickly to start the refinancing process is the only way to capture the best deals on the market, so contacting us now and getting offers locked in before they’re gone will likely pay in savings later. 

When you approach us to remortgage, we will give you personalised advice about the best products on the market for you. We’re currently seeing that some five-year fixed rates are more competitive than two-year fixed rates. Given the UK base rate will continue to rise and lenders will increase their mortgage rates along with it, longer-term fixed rates can be a great way to lock in the best rates and have clarity on mortgage spending over the next few years, and are certainly something we recommend you explore.

Remortgaging – how we can help

We are specialists in high-value and high LTV remortgaging. We can help you remortgage by:

• Arranging remortgaging offers in as little as 24-48 hours
• Streamline the application process to ensure it is as fast as possible
• Ensuring you have access to the best products on the market via our brokers and network of 500 lenders
• Negotiating your remortgage so your deal is personalised to your needs and financing requirements
• Offering a complete service to arrange remortgages in 4-8 weeks if you have all the necessary documentation ready
• Helping you time a remortgage deal to meet your current fixed rate ending 
• Running cost comparisons to understand if it makes sense to break a current mortgage and refinance, knowing what you’ll save
• Personalised advice on the best products available for you
• Remortgaging if you have an unusual or complex situation, e.g., you are an expat or non-resident

We have a proven track record assisting high-net-worth individuals to remortgage. Whether your present terms are coming to an end, if you are on a variable rate and want to explore a cheaper mortgage product than you are on already, get in touch – we can help.