Can I remortgage if I’m in the middle of my mortgage deal?
- The Cedar Crest Team
- Jun 18
- 2 min read
Exploring the options and considerations with examples
Yes, remortgaging during, an existing mortgage deal is possible, and sometimes
it’s even beneficial, depending on your circumstances.
You might consider remortgaging partway through a deal for several reasons, such as
consolidating debt, securing a better interest rate, or releasing equity from your home for
renovations or other financial needs.
While it may appear to be an appealing option, it’s essential to thoughtfully consider the
financial and practical implications before making a decision. Remortgaging during a deal
can incur additional costs and complexities. Below, we explore the options and
considerations with examples to help you gain a better understanding of the potential
benefits and challenges.
EARLY REPAYMENT CHARGES
The first major factor to consider is whether early repayment charges (ERCs) will apply if you leave your current mortgage deal before it concludes. These charges are typically associated with fixed-rate and discounted variable mortgages and can range from 1% to 5%
of your outstanding balance.
For instance, if you have a £200,000 mortgage with an ERC of 3%, you would need to pay
£6,000 to exit early. However, there are cases where remortgaging might still make sense.
Imagine you have two years left on your fixed-rate mortgage at 5% interest, but you’re
eligible for a new deal at 3%. If this new rate saves you £250 per month or £6,000 over
two years, the savings could offset the ERC. Our highly experienced team can help
you run these calculations and determine whether it’s financially worthwhile.
EVALUATING NEW MORTGAGE RATES
Another critical consideration is the rate you could secure on a new deal compared to your
current one. Interest rates are constantly shifting, and there could be an opportunity to
switch to a lower rate that reduces your monthly repayments. For example, if you’re currently paying £1,000 a month on a 4% interest rate, switching to a 3% rate could lower that to £800, saving you £200 monthly.
However, you must also account for associated costs such as arrangement fees, which can
range from £500 to £2,000. If these upfront costs outweigh the savings, it might not be the
right time to remortgage. Brokers are invaluable in guiding you through these comparisons, ensuring all costs are factored into your decision.
BORROWING ADDITIONAL FUNDS
Some homeowners may choose to remortgage mid deal to unlock equity for specific needs,
such as renovating their kitchen, building an extension, or consolidating high-interest debt.
For example, if your home is worth £300,000 and your outstanding mortgage balance is
£150,000, you might be able to access up to £60,000 in equity (depending on the lender’s criteria) by remortgaging.
However, borrowing more will increase your debt and monthly repayments. Taking out an additional £60,000 could mean your repayments rise by £300 to £400 per month, depending on the interest rate and term.
It’s important to ensure any additional borrowing aligns with your long-term financial goals and remains manageable within your household budget.
PORTING YOUR MORTGAGE
If early repayment charges make remortgaging impractical, another option is to consider
porting your mortgage. This allows you to transfer your existing deal to a new property, enabling you to move without facing significant financial penalties.
For instance, if you’re relocating due to a job change or need more space, porting could provide a seamless solution.
However, porting isn’t always straightforward. Lenders may require you to reapply for the mortgage under current affordability criteria, which could be challenging if your financial situation has changed. Before making any plans, we can check your lender’s terms
and conditions and discuss your options.
ACCESS TO EXCLUSIVE DEALS
One compelling reason to seek professional mortgage advice is to access products
that aren’t readily available to the general public. Lenders often reserve their best rates for borrowers working with mortgage brokers, meaning you might secure a deal that’s not listed on comparison sites or advertised directly.
For example, if you’re looking for a five- year fixed rate, we might find you one at 3.2%, while the best deal you can find online is 3.5%.
Over the term of your mortgage, this difference could save you thousands
of pounds. We also handle much of the paperwork, saving you time and effort during
the remortgaging process.
PRACTICAL EXAMPLES OF TIMING
Timing plays a crucial role in deciding whether to remortgage mid-deal. Imagine you’re 18 months into a five-year fixed- rate deal, but interest rates have dropped significantly, and your financial situation has improved.
By making accurate calculations, you might find that switching now saves you thousands even after factoring in any ERCs and fees. Alternatively, if rates are rising and your fixed deal ends in six months, it might make sense to wait to avoid unnecessary costs.
Conversely, if you need funds urgently—for instance, to fund unexpected major repairs in
your home or consolidate high-interest loans that are stretching your budget—that urgency might justify making the move sooner rather than later.
WHEN TO OBTAIN PROFESSIONAL MORTGAGE ADVICE
Deciding whether to remortgage during an ongoing mortgage deal is rarely
straightforward. It pays to consult a mortgage broker. We can assess your circumstances, explore every angle, and provide tailored advice. Additionally, we can help you understand all the costs involved, source the best deals, and guide
you through the application process.
If you’re feeling unsure, remember that we specialise in helping people make sense of situations exactly like these. Our expertise will ensure you’re making a well-informed
choice, whether you remortgage now, wait, or consider alternative options.
>> TIME TO TAKE CHARGE OF YOUR REMORTGAGE OPTIONS? <<
Get in touch. Book your free, initial consultation with our team to understand your options.
Cedar Crest Ltd – telephone UK T: +44 (0) 203 883 1017,
UK (For Cantonese and Mandarin enquiries):
+44 (0) 7888 431091
+44 (0) 7724 344788
HK T: +852 6645 4462
SINGAPORE: +65 8363 9221
– email info@cedar-crest.co.uk
Your home may be repossessed if you do not keep up with repayments.
If you’re unsure about the right move, it's always best to get advice from certified professionals. At website, our team of experts is available 24/7 to provide clear, upfront advice with transparent pricing. We’ll help you understand your options and whether remortgaging now makes financial sense for you.