Re-mortgages
Lenders will often offer a lower interest rate for the first few years of your mortgage. Re-mortgaging your property allows you to continue to take advantage of the better introductory rates that lenders offer, again and again.
Re-mortgage options
Most purchase mortgages start with an enticing lower interest rate, for a certain number of years.
As you come to the end of this initial period, you’ll know that your more favourable rate is about to change. Your lender usually contacts you in advance, asking you if you would like to re-mortgage with them.
Their offer may look very appealing, considering you are about to go on to your lender’s standard variable rate. And it might feel like the easy option.
However, it is just one option provided by your lender and you should always consider all the possibilities to see if you can get a better deal.
The right time to re-mortgage?
Re-mortgaging, especially with a different lender, may seem like a lot of effort for little reward. Wrong. Finding a new deal can save you a significant amount of money. Our checklist will help you decide if a re-mortgage is right for you.
- If you are about to go on to a standard variable rate (SVR) mortgage, and you are worried about high interest rates, then re-mortgaging can give you peace of mind, especially if you don't think you can afford to pay more.
- If your house value has increased and your Loan to Value (LTV) percentage has gone down, you might be entitled to a lower rate.
- You want to borrow more but are unable to with your current mortgage. A new deal may provide you with the opportunity to borrow more, on better rates.
- You want a mortgage that is more flexible than the one you have, so you can take payment holidays or choose to pay a little more when you can.
Get some Frank advice today
Mortgage applications can be stressful, and rejection is a daunting prospect. For expert, honest and plain-speaking advice and guidance, contact one of our mortgage advisers today.
Use our Frankly Calculators
Repayment Calculator
Thinking about your next mortgage? Use our Frankly repayment calculator to find out what your repayments could be, based on your loan amount, the desired term of your mortgage, and an indicative interest rate.
Stamp Duty Calculator
Stamp Duty, otherwise known as Stamp Duty Land Tax (SDLT), is the tax you pay when you buy property in the UK. You can use our Stamp Duty calculator to figure out what you’ll pay on your purchase (applies to houses, flats and land).
What are the different mortgage rates?
Just as there are several different types of mortgages available: interest only, purchase, buy-to-let etc.; there are also different types of interest rates. Here is a quick overview of the main types of rates you are likely to come across.
Standard Variable Rate
A standard variable rate (SVR) mortgage is a mortgage with an interest rate that can change at any time. It’s the interest rate that a lender charges after a fixed or tracker rate mortgage deal ends.
Each lender sets their own SVR, and the rate is usually higher than their other mortgage products. Some are up to 5% higher than the Bank of England base rate, so this can make standard variable rates an expensive option.
Fixed Rate
Fixed rates are set for an agreed period, varying in length from two to 10 years, and, in some cases, even longer. The general rule is the longer the fixed term, the higher the interest rate you will pay.
After the fixed term you will usually be transferred to the lender’s SVR (or standard variable rate) and if you want to pay off your mortgage early, or switch to a different deal during the fixed period, early repayment charges typically apply.
Tracker Variable Rate
Tracker rate mortgages are named so because your interest rate will track a base rate. Usually it’s the Bank of England (BofE) base rate. Each month you can expect your interest rate to change in accordance with any Bank of England base rate changes from the previous month.
This can be quite an appealing mortgage when the Bank of England’s base rate is low, but when BofE rates rise, so will your monthly payments.
Capped Rate
This is a type of variable rate mortgage that lets you know the maximum you will pay for a set period. This mortgage offers you the option of knowing the most you could be paying during a set period of, typically, two, three, or five years. Whist this offers peace of mind, it will come with a higher interest rate.
Capped rates have reduced in availability and popularity in the UK over recent years.
Discount Variable Rate
A discounted variable rate mortgage works a bit like a tracker, except instead of tracking an external base rate, it tracks the lender’s SVR at a discounted rate. If the lender’s SVR changes then so does the discounted rate.
Normally, the shorter the discounted period of time, the larger the discount on the rate. It is worth remembering that your lender is free to change its SVR at any time, which can make it tricky to manage your future budget.
Why choose Frankly?
We have access to over 90 lenders and more than 12,000 mortgage deals, which we believe is the most extensive range available in one place. We understand this is your mortgage and we want to give you the best advice, but you are under no obligation to follow it.
Get in touch
We know that any financial decision is a big step in every sense, and we want to make sure you are in the best position possible to take it.
We don’t do the hard sell and your inbox won’t be inundated with spammy content (we promise).
But we do aim to provide the very best advice we can to help you make the right decisions about your home and your financial security.
So, if you’d like to get some genuinely frank advice, then please complete our simple contact form and we’ll get right back to you.
Follow us
Honest financial advice for life’s biggest moments.
Access expert mortgage advice from over 90 lenders — clear, simple, and tailored to you.
We’ve built Frankly to put people first, with advice you can trust and products that work for your life. We’re open, honest, and direct, the very definition of Frankly.