SWITCHING MORTGAGE
Looking for a better and more flexible mortgage with the
option of cashback for home improvements?
Looking to Switch your Mortgage?
If you are considering a switcher mortgage / remortgage in Ireland but you are not sure about how to get the best deal and when to switch, then MortgageLine is here for you.
It is as simple as this, a switcher mortgage should save you money. A mortgage broker can help to save you money by finding a deal with a cheaper interest rate to reduce your monthly repayments.
MortgageLine works with mortgage customers all over Ireland from our base in Dublin.
Read on to learn:
- What is a remortgage?
- What does remortgaging mean?
- Things to consider
- When is a good time to think about a remortgage?
What is a Remortgage?
A remortgage is when you take out a new mortgage on a property that you already own. With rising mortgage interest rates, switching mortgages has become very popular as people try to save money.
For most people, a mortgage is the largest financial commitment they will have. In the same way that you might search for the best deal on a new car, it makes sense to review your mortgage every few years to make sure you are not paying too much.
Our friendly mortgage advisers love talking about remortgages and have the knowledge of the options available to you.
What does Remortgaging mean?
Remortgaging is the process of renewing your mortgage, either when your current deal is about to expire or because you want to find a cheaper or more flexible mortgage.
Lots of mortgage products have a fixed interest rate that is set for a fixed period, most commonly 2, 3 or 5 years.
After this period ends, the mortgage interest rate reverts to the lender’s standard variable rate or SVR and this is when mortgage repayments can become expensive. Getting a remortgage to a lower interest rate can reduce the amount of interest you pay and could lower your monthly repayments.
A mortgage is one of the biggest financial commitments you’ll ever make, so it makes sense to keep checking that you’ve got the best deal. Over time your circumstances can change and so remortgaging to a different deal or mortgage provider can make sense and give you the flexibility or change in terms and conditions that you’re looking for to fit in with your lifestyle.
Things to consider before Remortgaging
There are always costs involved with a remortgage and these need to be taken into account when considering whether remortgaging will be beneficial.
You may have to pay an early repayment charge to your existing lender if you remortgage.
If you are currently in a fixed rate deal that has not yet finished then you will probably be subject to payment of a fixed rate penalty. This penalty is usually up to 6 months mortgage interest. This can vary from lender to lender and will also depend upon how long your fixed rate has left to run.
If you want to release equity from your property to get a lump sum for home improvements then this means you will be increasing the overall amount you are borrowing. This will therefore mean a rise in your mortgage payments. However if you are doing home improvements then hopefully these will also increase the value of the property and so will have a positive effect on your LTV and snag you a better interest rate.
A remortgage to consolidate expensive short term debts might be right for you but you should do your sums carefully. Remortgaging may seem attractive as mortgages have relatively low interest rates when compared to credit cards or loans but borrowing over a long period may cost more in the long term.
When is a good time to think
about a remortgage?
Your fixed rate is coming to an end
If you have a fixed interest rate or discount mortgage deal then this will come to an end after a fixed amount of time.
A good time to start searching for a new deal is 3 to 6 months before the end of your current deal. You want to give yourself plenty of time.
You have a standard variable rate (SVR) mortgage
When your fixed deal rate ends, you will normally be moved on to your mortgage provider’s SVR. This may be higher or lower than what you were paying before but it may go up or down, so you will no longer have the security of a fixed rate.
If you are currently on a SVR, you may be able to save money by moving to a fixed deal. A move to a fixed deal can also help you to manage your monthly household bills as you will know exactly how much your mortgage payments will be for the fixed period.
You think that a better rate may be available
Even if you have a while left to run on your fixed rate then it may still be worth considering switching. The savings can be considerable, especially if you have a large existing mortgage. Also some mortgage lenders have reduced or removed fixed rate penalties. Our expert advisers can help you to work out whether switching is a good option for you.
Your property has significantly increased in value
If you have owned your property for a while and there has been an uplift in the property value then there could be savings for you. If the current value of your home means that you are now in a different loan to value (LTV) bracket then it may be possible to get a lower rate of interest and reduce your monthly mortgage payments. The better your LTV then the better interest rate you will get.
You need more flexibility
Sometimes the mortgage you chose when buying your property no longer meets your needs. It may be that your personal circumstances have changed and you would like a mortgage with the flexibility to allow you to take an occasional payment break. Or you may want to make a regular overpayment so that you can pay off your mortgage earlier, but your current mortgage lender does not have this flexibility. There are lots of different flexible mortgages out there which might suit you.
You need to release equity from your home
If you have enough equity in your home, you may be able to remortgage it to release some equity to provide you with a lump sum for home improvements. For example, to redecorate or remodel your home, or build an extension. A remortgage can be a cost effective way to finance the home improvements you need in an affordable way
