As a homeowner in Newcastle, if you don’t plan on selling your home and moving, and you have a fixed-term mortgage, you typically consider remortgaging around three months before your fixed period ends. While this may seem early, it allows enough time for the remortgage process to take place before your initial deal expires.
Some people may choose to remortgage even earlier, six months or more before the end of their current deal. So, the answer to the question, “can I remortgage early?” is yes, it is possible. However, just because you can, doesn’t necessarily mean you should.
When you are looking to remortgage in Newcastle, there are three common types of mortgages to consider: tracker, discount rate, and fixed rate.
The first is tracker mortgages. Tracker mortgages track the Bank of England base rate, which can lead to lower costs when interest rates are low but can also become expensive when rates are high. Some tracker mortgages have “collared” rates, meaning the interest rate won’t drop below a certain point.
Discount rate mortgages are a type of variable rate mortgage and are often offered by mortgage lenders at a discount to their standard variable rate mortgage.
Fixed-rate mortgages are the most popular among the three options. They allow you to lock in an interest rate for a specified number of years, typically 2-5 years. While there is a potential downside of paying more if interest rates drop, fixed-rate mortgages are more likely to provide benefits as interest rates are more likely to rise.
Remortgaging early is an option for homeowners who want to make changes to their mortgage before their fixed period is due to end.
Reasons to remortgage in Newcastle early may include securing a better rate, funding home improvements, or consolidating debts. However, it’s important to keep in mind that remortgaging early may come with its own set of challenges and additional costs, so it’s best to carefully consider the decision and weigh the potential benefits and drawbacks before proceeding.
Although it’s typical to remortgage when your fixed rate mortgage is approaching its end, there may be instances when you wish to act sooner.
If there are products available in the market with lower rates of interest, you may want to try and switch early. However, this action may come with early repayment charges (ERCs), but the savings you could achieve by remortgaging in Newcastle could potentially outweigh these charges.
The housing market tends to fluctuate, which can make it more beneficial to remortgage earlier rather than waiting until the end of your fixed period. For example, your interest rate may have risen by a significant amount, say 2-3%, over the course of the 2-5 years that you were fixed in. If you are still a year away from being able to remortgage in Newcastle without facing additional charges, it may be worth remortgaging early, even if it means paying more upfront. This way you may be able to secure a lower interest rate for the next 2-5 years.
In addition, remortgaging early could be a great opportunity for debt consolidation. This allows you to combine all your unsecured debts into one manageable monthly payment, freeing up more income for other expenses. Although this may result in paying more overall, it can help you manage your finances much easier and bring greater financial stability.
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.
The potential drawback of remortgaging in Newcastle early is facing repayment charges. The amount of these fees varies based on how soon into your term you are.
Typically, you’ll pay less if you remortgage closer to the end of your fixed period. For tracker mortgages, there’s no fixed period, but there’s typically an introductory period during which you may face fees.
These charges are often substantial, which is why many people avoid them. Before making a decision, it’s always wise to consult with your mortgage lender or a mortgage broker in Newcastle, like us, and get an understanding of any early repayment charges that may apply if you choose to exit your deal before its term ends.
At the end of the day, this decision is up to you, it is your mortgage and your finances. Although, you should seek mortgage advice in Newcastle prior to making a decision to get insight from a mortgage expert.
If you have weighed up your options and feel like it is best for you to remortgage in Newcastle early, then by all means go ahead. Just make yourself aware of all of the costs involved before acting on it.
Take advantage of our free remortgage review service today and connect with one of our experienced mortgage advisors in Newcastle. Your review will consist of a discussion between you and your mortgage advisor in Newcastle about your remortgage aims and a look at your personal and financial situation to determine which remortgage route is best for you.
We are available 7 days a week, make sure to get in touch at a time that best suits you.
Last edited 13/02/2023