A Guide to Remortgages in Cardiff: Top Reasons to Consider

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What is a Remortgage, and how does it work?

Remortgage Advice in Cardiff Reasons to Consider

Remortgage for a Better Rate

Remortgage for Home Improvements

Remortgage for Changes to Your Term

Remortgage to Release Equity

Debt consolidation

The mortgage journey is a rewarding process. Owning your own home can give you many achievements further in life, like a sense of financial security and getting into a better position to start having children/starting a family. For some, first time buyers in Cardiff felt that owning their own home was one of their top financial goals.

Suppose your reason for wanting to own a home was that it provided a sense of security. Others felt that taking out a mortgage was cheaper than renting.

Despite and any hurdles you might have come across along the way, you will end up with a stepping stone to further boost you up the property ladder or in a position to make an investment purchase to provide some extra income.

What is a Remortgage, and how does it work?

Remortgaging is where you take out a new lender’s product on a property you already own to either replace your existing mortgage or borrow additional money against your property. Suppose you decide to stay with your current lender and negotiate a new deal with them. Then this is called a product transfer.

Whether you are looking to remortgage or take out a product transfer, you will notice that many products out there each have their own set of different deals and rates available. Further down, we listed the most popular remortgage products accessible to most homeowners, along with why remortgaging may be beneficial to you.

When is a good time to remortgage? Whether it is to secure a better deal, for home improvements, consolidate debts, to release equity or because your circumstances have changed.

Remortgage Advice in Cardiff Reasons to Consider

Remortgage for a Better Rate

A fixed mortgage term lasts between 2 and 5 years for the vast majority. During that period, you will be paying off some interest and capital. 2-5 years later, when it comes to your remortgage, you may be in a position to be in a lower loan-to-value bracket, allowing you to access better rates.

If you decide further down the line not to remortgage, you risk yourself going onto a lender’s standard variable rate of interest (SVR). Which could be much higher than what you are currently on.

However, if you remortgage before this happens and you fit into a better loan-to-value bracket. You could be moved onto a much better rate, resulting in saving you money each month.

If you have been placed on a tracker mortgage, you will find that your monthly payments and interest rate corresponds with the Bank of England’s base rate, which can fluctuate depending on the economy’s performance.

For example, if the economy has dipped, base rates may lower, and vice versa. Lenders may also add an extra percentage onto this base rate so that you are usually tracking a rate between 2-4%.

Remortgage for Home Improvements

Once you are on the property ladder and settled into your new home, you may feel that the place needs some home improvements – whether that’s a new extension, conversion, or redecorating. If you choose to remortgage, there’s a possibility that you can get this work done for a reasonable price.

You will need to have the estimated costs of the improvements to get an idea of how much it will cost you. Then you can incorporate these costs into your mortgage upon taking out a new product. You will find that your monthly payments will increase depending on what you hope to achieve.

If you are looking to start having children/starting a family, want to add value to your home or add some home improvements, we would recommend remortgaging instead of going through the process of having to sell and buy a property simultaneously. In some circumstances, it’s easier to improve your current home.

Remortgage for Changes to Your Term

If you are looking to extend or shorten their whole term to try and switch to a more flexible product shorten your term will lead to paying off your mortgage quicker. But, it can also mean higher repayments. Whereas extending your term can reduce your payments but you will be paying off your mortgage a lot longer.

During the process, you can decide whether to extend your term or not. Choosing to shorten your term will lead to the option of overpaying, which can help pay off your mortgage faster.

Although a flexible mortgage sounds like a good idea, they usually coincide in the form of a tracker mortgage. A tracker mortgage matches the Bank of England’s base interest rate, which changes depending on how the economy performs.

Remortgage to Release Equity

Equity is the difference between what is still owed on the mortgage and the property’s current value. The longer you’ve owned property, the more equity you’re likely to have in it. At some point, you’ll be able to remortgage and release some of this equity to turn it into a lump sum of cash.

You can spend this cash however you want to. Some choose to use the equity to put down another deposit on another home to help a family member.

As a Mortgage Broker in Cardiff, we often see that landlords with a buy to let in Cardiff release equity to put down a deposit onto another property to expand their portfolio.

If you are over the age of 55 and have a property valued around at least £70,000, it may be worth looking at your options for equity release in Cardiff. Speak to an expert later life mortgage advisor to learn more about this.

Debt consolidation

If you’ve built up some unsecured debt and want to incorporate it into your mortgage, this can be made possible in some cases. However, you will need to get in touch and speak to Mortgage Advisor in Cardiff, as debt consolidation is a ‘complex’ subject.

Debt consolidation is based on how much you owe, your property value, and your credit rating. You need to consider that you’re trying to incorporate large sums into your mortgage. Therefore, your total mortgage amount will increase.

If you have bad credit and need help from a mortgage expert, don’t hesitate to contact us. We have debt consolidation experts at Cardiffmoneyman that will be happy to help you with your needs.

Expert Remortgage Advisors in Cardiff

It may be time to start your remortgage journey if you are coming towards the end of your fixed mortgage term. If you aren’t quite ready for that stage yet, we can take that stress away and do it for you!

We would advise that within 6 months of your deal ending, it may be time to start looking around for deals.

Book your own free remortgage appointment online today. We have advisors who are experts in giving Remortgage Advice in Cardiff. It’s our job to help you through your process and try and find you the most suitable deal that matches your personal and financial situation.

Date Last Edited: December 6, 2023