As a homeowner, if you don’t plan to sell your property and move, and your mortgage has a fixed term, it’s common to consider remortgaging your home in Cardiff about three months before the end of your fixed term.
This isn’t considered early remortgaging, as the process typically takes that amount of time. That being said, some individuals may choose to remortgage earlier, possibly six months or more before their mortgage term expires.
This leads to the question, “Can I remortgage in Cardiff before the end of my fixed term?” The answer is yes, there are no legal restrictions preventing you from doing so, however, that doesn’t necessarily mean it’s the best option for your situation.
Types of Remortgage in Cardiff
When it comes to remortgaging in Cardiff, you typically have three options to choose from: tracker mortgages, discount rate mortgages, and fixed-rate mortgages.
Tracker mortgages are tied to the Bank of England base rate, which can be cost-effective when rates are low, but can be expensive when they are high. These mortgages are not fixed, but you can have a “collared rate” that doesn’t drop below a certain level.
Discount rate mortgages are a type of variable rate mortgage that are offered to you by your mortgage lender as a discount from their standard variable rate mortgage.
Fixed-rate mortgages are the most popular of the three options. They allow you to lock in a specific interest rate for a certain number of years, usually ranging from 2 to 5 years.
The downside is that if interest rates decrease, you may end up paying more, but the likelihood of reaping the benefits of a fixed rate is higher, as those rates are more likely to increase, meaning you’ll be fixed into a lower interest rate than would otherwise be the case.
Why would I remortgage in Cardiff early?
Homeowners may consider remortgaging in Cardiff for various reasons such as securing a better interest rate, funding home improvements, consolidating debts, etc.
These objectives can all be accomplished in the three months leading up to the end of the mortgage term, so why else would you look to remortgage in Cardiff early?
For a Better Deal
While it is possible to remortgage in Cardiff to secure a better interest rate near the end of your fixed term, there may be situations where you wish to act sooner. For instance, if you are currently paying a higher interest rate than what is available, you may consider switching early.
That being said, this will likely result in early repayment charges, though if the savings from the switch outweigh these charges, it may still be a worthwhile option.
To Protect Against Interest Rate Rises
Typically, with the way the market trends are, this is more likely to be the case. Whilst you could simply wait until the end of your fixed period to remortgage in Cardiff and accept the current interest rate, over the course of 2-5 years, the rate may have increased by 2-3% or more.
If you are only a year away from being able to remortgage in Cardiff without incurring charges, you may decide that remortgaging early is worth the cost in order to secure a lower interest rate for an additional 2-5 years.
Some homeowners may also choose to do a debt consolidation remortgage in Cardiff at this point, combining all unsecured debt into a single, more manageable monthly payment. This may result in paying more overall, but can also free up more monthly income for other expenses and necessities.
You should think carefully before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments.
Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally.
Why would I want to avoid remortgaging in Cardiff early?
The main reason to avoid early remortgaging in Cardiff is because of early repayment charges. The amount of these fees varies depending on how far into your term you are.
Typically, the closer you are to the end of your initial fixed period, the lower the fees will be. For tracker mortgages, there is no fixed period, but there may be an introductory period during which a fee can be incurred.
The high cost of these fees is why most people opt to avoid them. That sad, as previously mentioned, remortgaging early may still be worth it in the long run if it results in significant savings.
Before making any decisions, it’s important to speak with your mortgage lender and understand any early repayment charges you may face, if you choose to exit your deal early.
Should I remortgage in Cardiff early?
Ultimately, the decision to remortgage in Cardiff early is yours to make. If you believe that it will provide you with long-term benefits, then it may be the right choice for you.
Even still, it is important to be mindful of any potential costs and to speak with an expert to ensure that it is the best option for your specific circumstances.
How to Remortgage in Cardiff Early
The process of remortgaging in Cardiff can be started ahead of your fixed periods’ end by booking a free mortgage appointment for trusted remortgage advice in Cardiff today. They will be able to offer you expert guidance and help you find the best deal that meets your needs and goals.
Date Last Edited: December 6, 2023
