Taking out a remortgage in Cambridge can be a great way for a homeowner to potentially save money on their money payments, or access funds that are sitting within their home. This can be done usually by remortgaging to release equity.
The vast majority of homeowners will generally start their remortgage process around 3-6 months prior to their current deal finishing. Despite this, there are always homeowners out there that are unsure if they are able to remortgage in Cambridge during a fixed term, earlier than many normally would.
A fixed term mortgage allows you to maintain regular monthly payments for a specified period, usually lasting from two to five years, with an unchanging interest rate. In this article, we will investigate the feasibility and advisability of remortgaging in Cambridge while under a fixed term.
When should you look into a remortgage in Cambridge?
Homeowners in Cambridge will generally look to remortgage their property about 3-6 months before their current deal expires.
This time frame allows a mortgage broker in Cambridge to perform their job effectively and ensures a smooth transition as your new deal becomes ready just as the old one finishes.
This approach also helps you avoid falling onto your mortgage lender’s standard variable rate of interest (SVR), which is often much higher than the Bank of England base rate and can fluctuate solely at the discretion of the mortgage lender.
Remain cautious of these deals as they are usually more costly, and are likely not your optimal choice.
Your mortgage advisor in Cambridge will use the period before your current deal ends to search for better alternatives that suit your requirements and objectives, such as remortgaging in Cambridge for home improvements.
Can you remortgage in Cambridge during a fixed term?
It is possible to remortgage in Cambridge during your fixed term, but if you do so while the fixed term is still ongoing (and before the usual 3-6 months prior), it would be considered as remortgaging early.
Technically, you can do this, as there is nothing stopping you from applying for a new mortgage deal, however, it’s important to keep in mind that there are usually penalties associated with breaking a fixed term mortgage contract.
This means that if you choose to remortgage early, you will likely be subject to early repayment charges from your mortgage lender. These charges can be quite high, and may offset any potential savings you might make by switching to a new deal.
Therefore, before you decide to remortgage in Cambridge during your fixed term, it’s important to weigh up the potential benefits against the costs.
You should speak to a mortgage advisor in Cambridge to help you determine whether it makes sense to switch deals early or whether it would be better to wait until your fixed term comes to an end.
They will be able to give you tailored remortgage advice in Cambridge based on your individual circumstances and financial goals.
Should I remortgage in Cambridge early?
Determining whether it is beneficial to remortgage during your fixed term ultimately depends on your financial goals and situation.
It is always recommended to get mortgage advice of a qualified mortgage advisor in Cambridge before making any decisions. Remortgaging is typically only pursued if there is a compelling reason to do so.
There are several popular reasons for remortgaging in Cambridge, including securing a better deal if you are currently paying a higher interest rate than what is available on the market, as well as protecting against potential interest rate increases and inflation.
Whilst this is the case, it is essential to carefully consider the long-term financial implications of remortgaging during your fixed term, as early repayment charges can be expensive.
It is important to determine whether the potential benefits of remortgaging outweigh the costs, or if it is better to wait until your fixed term has expired.
Why don’t people usually remortgage in Cambridge early?
We would recommend that you try to avoid remortgaging early due to the possibility of any early repayment charges.
Depending on how early you choose to remortgage, these charges could end up being quite high. The cost of early repayment charges tends to increase the earlier you choose to take out your remortgage in Cambridge.
On the other hand, if you determine that remortgaging early is financially beneficial in the long run, despite the charges, then it could be a good option for you.
We highly recommend speaking with a mortgage advisor in Cambridge beforehand, to assess whether remortgaging early is the best decision for your circumstances.
Can I remortgage in Cambridge early with the same lender?
While remortgaging in Cambridge usually entails taking out a new mortgage with a different mortgage lender, it’s worth noting that you may have the option to transfer to a new product with your current mortgage lender. This is known as a Product Transfer and is becoming increasingly popular.
Your mortgage lender or mortgage advisor in Cambridge may inform you of when your current deal is set to expire, giving you enough time to consider your options. If you wish to proceed with a Product Transfer before your current deal ends, you may still have to pay early repayment charges.
Staying with your current mortgage lender could also result in lower fees as there are no additional legal costs that come with switching to a new mortgage provider.
Fees to Consider with an Early Remortgage
Like any mortgage, remortgaging in Cambridge will involve paying various fees. When remortgaging early, you may also be subject to an early repayment charge.
Early Repayment Charge
An early repayment charge is an expense that you will almost inevitably face if you plan to exit your mortgage deal early, especially during the fixed period. The earlier you decide to leave, the higher the cost of the charge is likely to be.
The logic behind this charge is that, when you entered into the mortgage agreement, you committed to repaying the borrowed funds over a specific period of time.
Although remortgaging in Cambridge may benefit you financially, it is technically a violation of the terms you agreed to, and may therefore result in a penalty fee.
Exit Fees
Exit fees are a common feature of most mortgages, and in some cases, they are mandatory to finalise your mortgage once you have fully paid it off. These fees can be encountered both at the end of your full mortgage term and when you decide to remortgage in Cambridge and switch to a new deal.
Valuation Fees
Valuation fees are typically associated with remortgaging in Cambridge since when you opt for a product transfer, your existing lender already knows the value of your property. On the other hand, a new mortgage lender will want to assess the value of your property before offering you a new deal.
Whether or not you will need to pay a valuation fee depends on your mortgage lender. Some mortgage lenders may include it as part of their service, while others may charge separately for it.
Your mortgage advisor in Cambridge can provide you with more information on this during your free mortgage appointment.
Arrangement Fees
Product fees, also known as arrangement fees, are typically associated with a specific mortgage product. These fees can be added to your mortgage balance and paid off over time with your monthly payments, but you may also have the option to pay them upfront.
How to Remortgage in Cambridge Before Your Fixed Rate Ends
Typically, most mortgage deals, including fixed rates, require a commitment of at least 6 months before you can consider a remortgage in Cambridge. It’s important to note that attempting to remortgage in Cambridge before this period is up will likely result in substantial charges.
If you’re considering an early remortgage in Cambridge, it’s important to first contact your mortgage lender to understand the charges that would be present. Additionally, speaking with a trusted mortgage advisor in Cambridge will help in determining whether it is a wise decision to make.
As a mortgage broker in Cambridge, we offer a free remortgage review with a member of our remortgage advice team to discuss your situation and provide guidance on whether it’s financially beneficial to proceed with an early remortgage in Cambridge or wait for a more appropriate time.
Date Last Edited: December 6, 2023
