What does remortgaging mean?
Remortgaging is the process of replacing one loan with another – usually this means paying off one mortgage with the proceeds from a new mortgage using the same property as security.
This can be done for a number of reasons:
to get a better interest rate
for more flexibility
to consolidate debt
Reducing your loan-to-value to get a better rate
Our new Remortgage Calculator is just being checked - you will be able to see how much you might be able to save by switching your mortgage.
What does it mean to remortgage?
When we talk about remortgaging our property we are focused very clearly on a property remortgage in Ireland - significantly different from many of our neighbours.
So to be clear when we say remortgage we mean changing the interest rate, the term of the mortgage, the type of mortgage or any of the conditions attached to the mortgage. Often when people think of remortgaging they are looking to reduce the monthly payment that they make - this is a perfectly reasonable outcome, but is not the only one!
It is also important to understand that remortgaging is not the same as switching mortgage - both looking to remortgage your loan or switch to another lender are valid options you need to look at what is the best option for you.
We are living in extraordinary times - there are issues we cannot control, but there are others that we most definitely can.
Why can I remortgage?
If we live in a house that we own with a mortgage, or own one or more properties that we let to others we may NOT be getting the best deal on that mortgage:
- the original loan will have been based on a Loan to Value at that time - it is very likely that this will have changed - our house may be worth more, and we may owe less - so for our lender we have become a much better risk and they may be able to apply a different rate.
- Our circumstances may have changed - we may have been in the same job for longer, got a promotion, a pay rise or some share options or bonuses - gain this may affect the way we are looked at by a lender.
- We may be thinking of staying where we are for longer, investing in extending our property rather than moving, starting or adding to a family - this may mean we would consider extending the term of our mortgage, so spreading the cost into the future.
No matter what your current situation is it would be good to talk through the options available, and now may be the best time to look at it - there are plenty of choices and the lenders and Irish Mortgage Corporation are very much open for business.
Getting professional advice is as easy as scheduling an online meeting or booking a call.
When should you remortgage?
- When your fixed-term deal is coming to an end. You’ll be moved to your lender’s standard variable rate (SVR) when your fixed-rate deal ends. This is usually higher than your original deal.
- To get a better interest rate. You may be able to find a mortgage with a lower interest rate than yours for the same term, so your monthly payments will go down.
- If you need to know what your outgoings are. Having a fixed- term mortgage means you’ll know how much you’ll have to pay every month. Also, your mortgage won’t increase if interest rates rise.
- To get a more flexible deal. Not all mortgages allow overpayments or mortgage holidays (when your lender grants you a temporary break from paying your mortgage, or lets you reduce your payments for a few months). If these are important considerations for you, then you may want to try to switch to a more flexible deal.
- If your home’s value has increased. You may be able to get a better deal because of changes to the loan-to-value ratio (see the answer to the next question).
- To borrow more. To use some of the equity you’ve built up in your property, for example, to fund home improvements.
- To consolidate debt. You might want to consolidate debts to reduce your monthly outgoings, or to borrow at a lower interest rate.
- You’ve had poor service from your mortgage provider. You may want to change to one with a better reputation for customer service and satisfaction.
Remortgaging to get a better interest rate
Remortgaging for more flexibility
Remortgaging to consolidate debt
Reducing your loan-to-value to get a better rate
Home value has increased
To get more money!
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