Changing your mortgage, or remortgaging, simply means switching from your current mortgage deal to a new one. This could be with your current lender or a completely different one. People typically remortgage for a few reasons:
- To save money with a lower interest rate
- To reduce monthly payments
- To fix their rate for longer and protect against future rises
- To borrow more money (for home improvements, for example)
But right now, the big motivator is the potential to save money. If your current mortgage rate is higher than what’s currently available, switching could shave hundreds—if not thousands—off your annual payments.
What’s Changed in the Mortgage Market?
After interest rates peaking over the last couple of years, the Bank of England has recently been cutting the base rate in stages over the last few months, and lenders have followed suit with more attractive mortgage products. We’re seeing fixed-rate deals that are considerably lower than they were even just six months ago.
This shift means that for the first time in 12 months, remortgaging could be a real opportunity to cut your costs and free up some monthly breathing room.
The Pros of Changing Your Mortgage Now
Let’s talk benefits. Why might now be the perfect time to switch?
- Lower Monthly Payments
Even a 1% drop in your mortgage interest rate can make a noticeable difference. If you’re on a rate of 5% and you can now get a deal at 4%, that could mean saving hundreds of pounds a month depending on your loan size.
- Beat Future Rate Increases
Nobody has a crystal ball, but some economists predict that rates could rise again in the future. Locking in a lower fixed-rate mortgage now can protect you from potential future hikes.
- Peace of Mind
Knowing what your mortgage payments will be for the next two, three, or five years can offer financial stability in an unpredictable economy.
- Potential to Overpay and Clear Your Mortgage Sooner
Some new deals allow you to make overpayments without penalties. If you’re looking to get mortgage-free faster, this can be a great way to do it.
The Cons to Consider Before You Switch
Of course, remortgaging isn’t always the slam dunk it seems. Here’s what to be aware of:
- Early Repayment Charges (ERCs)
If you’re still within your fixed-rate period, your current lender may charge you a fee to exit the deal early. These can be hefty, so it’s essential to crunch the numbers.
- Arrangement Fees on New Deals
Some of the better rate deals come with upfront costs like product fees, valuation fees, or legal fees. These can eat into your savings unless factored in carefully.
- You Might Not Qualify for the Best Rates
Your eligibility depends on your credit score, income, loan-to-value (LTV) ratio, and current property value. If these have changed since your last mortgage, it could affect what you’re offered.
- The Process Takes Time
Switching mortgages involves paperwork, affordability checks, and sometimes legal work. It’s not a five-minute job, so you’ll need to be prepared for a bit of admin.
How Do You Know If It’s Worth It?
This is where things can get a bit maths-y (don’t worry, we can help with that!). The main question is:
Will the savings from switching outweigh the costs involved in changing your mortgage?
If the answer is yes, it could be a very smart move.
For example, if you’re currently paying 5.5% interest and can switch to a deal at 4%, even after factoring in fees, you might save thousands over the next few years.
At HLC Mortgages, we can run all these numbers for you—clearly and without any jargon. Our goal is to show you whether switching now makes sense for you.
Should You Wait or Act Now?
Great question! Mortgage rates are unpredictable. Some people are tempted to wait in case they fall even further, but there’s no guarantee they will.
If you find a deal that saves you money now, it often makes sense to grab it rather than gamble on what the market might do next. Some lenders even allow you to lock in a rate for up to six months, so you can secure today’s rate and switch when the timing is right.
Final Thoughts
Changing your mortgage to take advantage of a better rate can absolutely be cost-effective—but it depends on your individual situation.
With the Bank of England base rate dropping, now is the best time in over a year to explore your options. Whether you’re near the end of your current deal or just want to see if you could be paying less, it’s worth a quick chat.
Let’s See What You Could Save
At HLC Mortgages, we do all the legwork for you. We’ll search whole of market, break down the fees, and tell you in plain English whether switching makes financial sense. No guesswork. No pressure. Just straightforward advice.
Get in touch today to book your free mortgage review. It might just be the most money-saving phone call you make this year.