5 reasons why you should remortgage right now

What’s happening to interest rates right now?

The Bank of England’s base rate has risen 14 times since December 2021, gradually increasing from 0.10% to 5.25%. Although the base rate is at the highest it's been since the 2008 financial crisis, economists believe it’s reached its peak and we can expect a cut sometime soon. 

During a press conference on the 9th May 2024, the Bank of England’s governor Andrew Bailey said: “With the progress we’ve made, to make sure inflation stays around the target, it is likely that we’ll need to cut bank rates in the coming quarters.” 

If the base rate does fall, we could see more affordable fixed-rate deals on the market. Some lenders began offering cheaper fixes in the summer of 2023 in a bid to attract new customers, but it’s impossible to say with certainty what will happen to mortgage rates this year.

Take a look at our base rate tracker to see how it’s changed over time and what it means for you. 

Why you should remortgage now, instead of waiting:

1. Your fixed rate is due to end in the next six months

If your fixed-rate mortgage is set to end in the next six months or less, looking for a new deal sooner rather than later could save you stress and money. The mortgage market is constantly changing and some of the cheaper deals you’ll see today might no longer be available in a few months’ time. You can lock in a new deal to move onto up to six months before your current one ends - protecting you from potential future rate rises. And if mortgage rates go up in that time, you can reapply to benefit from the better deals.

Learn more: How long should I fix my mortgage for?

2. You’re on your lender’s SVR

When your fixed-rate deal ends, unless you remortgage onto a new deal you will be automatically moved onto your lender’s Standard Variable Rate (SVR). This is typically much higher than fixed-rate or variable-rate deals available on the market - right now, they are 2.25% higher than the average two year fixed-rate, and 2.68% higher than the average 5 year fix! For a £200,000 mortgage that extra 3% could cost you over £4,000 more in repayments each year*. So while it may seem like doing nothing is easier, it could end up costing you hundreds by not remortgaging onto a new deal.

Price comparison websites can give you a glimpse into the mortgage rates available, but they don’t show you what deals you are eligible for, or what rate you could be offered. At Tembo, we compare your eligibility to thousands of deals from over 100 lenders in seconds to generate you a personalised mortgage recommendation - all thanks to our unique smart decisioning technology. So you can see what rates you could be offered, and indicative repayments. Get started here. 

If you don’t go through a mortgage broker, before you remortgage find out whether your lender will charge you a fee to exit your current deal early. You might also have to pay product and arrangement fees to your new lender. If you’re using a mortgage broker, they’ll navigate the terms and conditions for you and help work out whether savings can be made. 

In some cases, you’ll save far more money by switching to a new mortgage deal than you’ll pay in early repayment charges and fees. This won’t be the case for everyone, though, which is why mortgage advice is so invaluable when making a decision. 

Compare live remortgage rates and deals or see what your repayments could look like with the help of our Remortgage Calculator. To understand your eligibility and see what personalised rates you could be offered, create a free Tembo plan for a personalised recommendation in minutes. 

*Based on a £200,000 repayment mortgage with a 20-year term, comparing a fixed-rate deal with an interest rate of 5% vs an SVR of 8%, making the repayments £1,320 and £1,673 respectively. 

3. You’ve got a variable rate mortgage

Variable-rate mortgages have their benefits. They tend to have lower arrangement fees than fixed-rate or tracker deals, they offer the freedom to overpay without any fees, and can often work out cheaper than fixing your rate for a set period of time. 

However, many homeowners are better suited to fixed-rate mortgages. Not only can fixed-rate mortgages protect you from rising rates in future, but they can also offer peace of mind and stability. You’ll know exactly how much your repayments will be for the duration of your fixed period, making it easier to budget and plan ahead. 

4. You want to release money tied up in your home

If you’d like to release funds from your home to spend on home renovations, help a loved one get on the property ladder, or buy an investment property, remortgaging could be the answer. The average UK property owner is sitting on a home equity of £111,081, based on those who purchased in 2020. So you might be surprised by how much money you could have locked up in your home to use for other things!

5. You need help to boost your affordability

If you’re struggling to remortgage, you could boost your affordability to help you move onto a new deal with the help of an Income Boost. Often referred to as a Joint Borrower Sole Proprietor mortgage (JBSP), an Income Boost lets you increase your mortgage affordability with the help of a loved one. By adding some or all of their earnings to your household income, they can help you access more remortgage deals.

Don’t worry, your guarantor won’t be named on the property itself, so your home will still belong to you! They’ll simply be named on the mortgage. You’ll still be responsible for making your monthly repayments, but if you’re ever unable to pay your mortgage in future, your guarantor will need to step in and help.