If you have had your mortgage for more than two years, then now is a great time to review your options.
With a new remortgage you can get a better interest rate, get cashback for home improvements and or consolidate loans to lower your monthly outgoings.
Save with a Better Mortgage Rate
There is a huge difference between the lowest and highest mortgage interest rates. The difference can be as high as 2% or more. On a mortgage of 250,000 this would mean monthly savings of over 400 per month or 4800 per year. Not too shabby. You could use the savings to have a fantastic holiday each year or choose to clear your mortgage years early.
Hopefully you are not on one of the very high mortgage interest rates. However even if you can only reduce your mortgage interest rate by 0.5% (half of 1%) then you could still save over €100 per month (based on a mortgage of 250,000 over 25 years). Over the life of the mortgage this could be more than €30,000 in your pocket instead of your banks pocket.
Get Cashback for Home Improvements
Another reason you might want to consider switching mortgage lenders is to raise some funds for home improvements.
You may need a new kitchen or bathroom, or more space for a growing family. Getting work done on your house can be exciting but expensive. However with a remortgage you can spread the cost over your remaining mortgage term to make the work more affordable.
Let’s say for example that you wanted to borrow an extra 50,000 to upgrade and extend your home. This could cost as little as €227 per month (based on an increased mortgage @ 2.6% over 25 years)
Consolidate your debts into one lower monthly repayment
As well as getting a better interest rate and cashback for home improvements it may also be an option for you to consolidate expensive short-term debt.
You may have a car loan, credit union loan, credit cards and other short term debts. Together with your monthly mortgage repayment it can be a struggle to make ends meet and have any kind of life.
See the example below to see how a new debt consolidation mortgage might help.
Debt Consolidation Remortgage Example
A new remortgage will certainly improve your current cash flow and take the pressure off. In the example above there is a monthly reduction of €796.
However, it may not be a good idea to pay short term debts over a longer mortgage term. For example you may need to change your car in 5 years so not a good idea to pay the car debt over 25 years.
For this reason, you may decide to split your mortgage and pay some of the short-term debt over a shorter term. You will still save money with the much lower mortgage interest rate.
Special Offers available
Mortgage Lenders are really keen to get your business at the moment and so they are offering incentives for you to switch your mortgage.
Most lenders are offering cashback amounts to at least cover your legal fees and free valuations.
If you are thinking of a new mortgage, then it is worth speaking with a Financial Adviser to talk over your options and see what is right for your circumstances.
MortgageLine are here to help. Give us a call or request a callback to see how a new mortgage can help you get your finances in order.