How Soon Can I Remortgage? | Rising Interest Rates | Fixed 2-5 Yr & More

Hi, welcome back to our channel and podcast! My name is Gemma, and here at WIS, we talk about money, mortgages, and positive money mindset.

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On today’s episode of Let’s Talk Money and Mortgages, we have Ifthikar joining us again. For those who don’t know, Ifthikar is a trained accountant and mortgage advisor with over 11 years of experience, and one of the founding directors at WIS.

Today’s topic: interest rates are rising and when you can remortgage.

Q1: What is remortgaging?

Gemma: For those who don’t know, can you explain what remortgaging is?

Ifthikar:

When someone takes a mortgage, e.g., a 25-year term, there is usually a fixed deal period (2, 3, or 5 years).

After the deal ends, borrowers fall into a standard variable rate (SVR), which is usually much higher—often 2–3 times more than the fixed rate.

Remortgaging means applying for a new deal to avoid the high SVR.

Example: You finish a 2-year fixed rate and take another 2-year or 5-year deal at a better rate.

Your mortgage term may still remain 25 years, but your deal is updated to a more favorable rate.

Q2: When is the earliest you can apply for a remortgage?

Ifthikar:

Normally, 3–4 months before your current deal ends is ideal. This allows enough time to:

• Find a good deal
• Complete legal work
• Ensure a smooth transition to the new deal

Given rising interest rates, some people consider 6–8 months in advance.

Caution: Mortgage offers usually remain valid for 6 months. Applying 8 months ahead may risk the offer expiring before the deal ends.

In some cases, paying a penalty to break the current deal may be worth it if the new rate is significantly lower.

Example:

• Current rate: 5%
• Penalty: 1%
• New rate: 3%
• Total effective rate: 4% (still lower than 5%)

Tip: Review your mortgage annually to see if better deals are available.

Q3: What should you watch out for with mortgage offers?

Ifthikar:

Ensure the offer does not expire before your current deal ends.

Some lenders don’t automatically renew offers anymore.

Always check the expiry date on the mortgage offer.

Sometimes it is not shown on the Key Facts Illustration (KFI), so double-check with the lender.

Advisors can guide you to avoid applying too early and risking an expired offer.

Q4: How long should you fix your mortgage for?

Ifthikar:

Options range from 2, 3, 5, 7, 10, or even 11 years.

There’s no one-size-fits-all answer; it depends on your circumstances:

• Shorter deal: More flexibility, lower early repayment charges, but may need to remortgage sooner
• Longer deal: Less flexibility, potentially higher interest rates, but stability for the term

Example scenarios:

• Young family moving in 2 years: Shorter deal may be better due to potential penalties for breaking the mortgage early
• Older, settled homeowner with a small mortgage: Longer deal may work if stability is preferred

Q5: What can customers do given rising interest rates?

Ifthikar:

Act early: Apply as soon as the remortgage window opens.

Plan ahead: Know when your deal finishes and start preparing 6–7 months in advance.

Talk to an advisor: They can guide you on:

• LTV considerations
• Savings targets
• Document preparation

Prepare documents in advance:

• Check credit score
• Ensure nothing has changed financially
• Gather necessary income and asset documentation

Applying early protects against sudden rate rises. If rates drop later, you may still have options to adjust.

Q6: Any final tips for remortgaging in this climate?

Ifthikar:

Plan in advance to get the best rates and options.

Online mortgage calculators may not reflect your specific circumstances.

Speak to a broker—many, like WIS, are fee-free and get paid by the lender.

Closing

Gemma:

These points may not apply to everyone; always consult a broker for guidance.

WIS contact details are below if you need support.

Reminder: A mortgage is secured against your home or property and may be repossessed if repayments are not maintained.

Thank you for joining us! We’ll be back next week with another episode of Let’s Talk Money and Mortgages.

Have a great day, stay safe, and see you soon!