It’s easy to think that setting up a mortgage is something you do when you buy your home, and then you can forget about it. After all, it was a complex procedure, so why would you want to go through that again if you don’t need to?

In fact, a third of all mortgages involve remortgaging, and there are various good reasons for doing this.

Why Switch Mortgage?

While there are many reasons why you might want to switch your mortgage, the most common would be when your current mortgage deal comes to an end. If you do nothing, you’ll simply be put onto a Standard Variable Rate mortgage (SVR) — and that could prove expensive.

The reason is that SVRs tend to involve higher interest rates than fixed-rate mortgages. At the moment, for example, you’d pay between 4% and 5% for an SVR, whereas a fixed-rate mortgage is likely to be between 1.5% and 2.5%.

This can work out as a considerable saving. Even coming down from 5% to 3% would mean paying £144 per month less on a mortgage with £175,000 still to repay, adding up to an annual saving of £1,728.

Other Reasons for Switching

Reviewing your mortgage arrangements when your deal ends should be a no-brainer, but there are other circumstances when you might look at whether you need to switch. These include when:

• Interest rates have changed
• The value of your home has significantly increased
• Your current mortgage has restrictive rules, such as not letting you overpay
• You want to switch from an interest-only to a repayment mortgage
• You want extra borrowing
• You think you might be able to get a better rate

Any of these can be a good reason to switch, but you need to look at all angles. For example, your current mortgage may involve a hefty fee for early repayment. This is one of many reasons why it’s best to get expert advice when you’re considering switching.

Is Switching Easy?

That depends on how you go about it. There’s a good deal of research and paperwork involved in switching. If you simply go along to a lender, you’ll need to work out exactly what your home is worth, how much you need to borrow and what the appropriate repayments will be, among many other details.

On the other hand, using expert advice such as Mortgage Rate Switcher can cut out a good deal of that work and make the process fairly straightforward. Why not get in touch with us if you want more information on switching your mortgage?