Remortgaging | Real Mortgage advisors advice | WIS Mortgages

Introduction

Hello, welcome back to our channel podcast. My name’s Gemma, and here at WS we talk about all things relating to money, mortgages, and positive money mindset.
On today’s episode of Let’s Talk Money and Mortgages we have Issura, a trained accountant and mortgage advisor with over 10 years of industry experience and one of the founding directors here at WS.

Q1: What is remortgaging?

Issura:
When someone buys a new house, the mortgage term is usually 25–30 years.
But along with that, they strike a deal with the bank for a shorter period (2, 3, or 5 years).
When this deal period ends, you need to remortgage.
If you don’t remortgage, you move to the bank’s Standard Variable Rate (SVR), which is usually much higher (e.g., ~3.5%) compared to the lower deal rates (1.5–2%).
That’s why remortgaging is important—to avoid paying a higher SVR.

Q2: Can you remortgage before the end of your term?

Issura:
Yes, but most people don’t, because of early redemption charges (penalties for ending a deal early).
Sometimes people do if:
They’re on a higher rate (e.g., 3%) but qualify for a much lower one (e.g., 1.5%).
The penalty is smaller than the savings they’d make.
Others remortgage early to borrow more money for investment or buying another property.
Always seek advice—an advisor can calculate if it’s worth it.

Q3: How long does it take to remortgage?

Issura:
Normally: 4–6 weeks if all goes smoothly.
But due to delays (e.g., pandemic, remote working, surveyor availability), we suggest starting the process at least 4 months in advance.
Why? Because if issues arise (like a lower property valuation), you might need to go to another lender, which takes more time.

Q4: When is the best time to remortgage?

Issura:
Ideally:
1 year before – Start planning with your advisor.
6 months before – Check if your plans are still on track.
4 months before – Start applying.
Some banks issue offers valid for 6 months, so you can apply early.

Q5: Should you review even if you’re on a long-term deal?

Issura:
Yes. Even on a 5-year deal, it’s wise to review annually.
Circumstances change (new job, family changes, etc.), and better deals may become available—even if breaking your current deal involves a penalty.
A yearly “mortgage health check” helps ensure you’re still on the best deal.

Q6: Do you have to stay with the same lender?

Issura:
No, you don’t.
Lenders will warn you about your deal ending, but that’s the best time to shop around.
Staying with the same lender = less paperwork, but moving lenders can save you more money.
Brokers (like us) can compare across lenders to get the best deal.

Q7: Does it cost money to move lenders?

Issura:
In theory yes (solicitor + valuation).
But in practice, most lenders cover these costs:
Free valuation.
Free legal services (conveyancing).
Or cashback (£300–£500) towards costs.
So switching lenders often costs you nothing.

Q8: Can you choose your own solicitor?

Issura:
Yes, as long as they’re on the lender’s panel.
But if the lender is offering free legal services, it’s best to use their solicitor.
Cashback options give you more freedom to choose.

Q9: Do you always need a solicitor when remortgaging?

Issura:
Yes, if you’re moving lenders.
Usually, it’s just a conveyancer (cheaper than a full solicitor).
Costs: £250–£300 (conveyancer) or ~£500 (solicitor).
But most of the time, the lender covers this cost.

Q10: Do brokers charge for remortgaging?

Issura:
Many brokers do charge fees (for advice, not for the product).
At WS, we don’t charge broker fees—we work within the bank’s commission.
But it’s normal for brokers to charge if commissions are very small.

Q11: Is the process quicker than buying a house?

Issura:
Yes. Buying involves full searches; remortgaging usually doesn’t.
It’s mainly title checks, income verification, and paperwork.
If staying with the same lender, the process is even simpler.

Q12: Should you pay extra money towards your mortgage when remortgaging?

Issura:
Yes, if possible—it reduces debt faster.
Many people keep large “rainy day funds” while paying 2–3% mortgage interest, which doesn’t make sense.
Paying extra on your mortgage is often the best long-term decision.

Q13: Two-year vs five-year deals: which is better?

Issura:
Two-year deals:
Lower early repayment charges.
More flexibility if your circumstances change.
Help reduce mortgage balance faster.
Five-year deals:
More certainty.
Often more expensive.
Risk of paying large penalties (up to 5% of mortgage balance) if you break early.
Recently, the gap between 2- and 5-year deals has narrowed, tempting more people into 5 years—but tread carefully.
Best choice depends on your personal circumstances—seek advice.

Q14: Should you borrow extra money when remortgaging?

Issura:
Not generally recommended—it slows down paying off your mortgage.
Exceptions:
Consolidating high-interest debts (e.g., credit cards at 20%).
Funding house extensions (adds value).
Buying an investment property.
Always seek advice before borrowing more.

Q15: Should you increase or reduce your term when remortgaging?

Issura:
Reduce term whenever possible—it helps you become debt-free faster.
With lower interest rates now, many people can reduce their term while keeping monthly payments the same.
Extend term only if:
Your income drops.
You need to reduce monthly payments temporarily (e.g., job loss, pay cut).

Q16: Fixed vs variable rate—what’s best?

Issura:
Fixed rates:
Best for budgeting.
Protect against rising interest rates.
Variable rates:
Can benefit if rates fall.
Some trackers have no early repayment charges, useful if moving soon.
Sometimes cheaper than fixed.
With Bank of England base rate currently at 0.01%, the only likely direction is up, so fixed rates may be safer now.
Again—depends on circumstances.

Closing Notes

Gemma:
Thank you, Issura, for your advice. Reminder: this advice may not apply to everyone—please check with an advisor before making decisions.
If you don’t have an advisor, WS are always happy to help.
A mortgage is secured against your home or property. It may be repossessed if you do not keep up with repayments.