Held interest rates and evolving mortgage products make it essential to evaluate your options carefully. Here, we provide a guide to help you assess whether remortgaging is the right move for you this year.
Why Consider Remortgaging?
Remortgaging involves switching your existing mortgage to a new deal, either with your current lender or a new one. Homeowners typically remortgage for the following reasons:
- Securing a Better Rate: If your current mortgage deal is coming to an end, you may want to shop around for a lower interest rate to save money.
- Fixing Your Payments: In times of fluctuating interest rates, switching to a fixed-rate mortgage can provide stability and predictability for your monthly payments.
- Property Value: If your property’s value has increased, remortgaging could place you in a lower loan to value band and may be eligible for lower interest rates.
- Borrowing More: Some homeowners use remortgaging as an opportunity to raise additional funds on a lower rate for home improvements or for paying off debts.[1]
The 2025 Mortgage Landscape
Interest rates have been a major talking point over the past year, and 2025 is no exception. With rates remaining higher than in previous years,[2] many homeowners may find themselves paying more on their standard variable rate (SVR) mortgages. Switching to a competitive deal could help reduce costs. However, it’s important to note that fees for exiting your current deal and setting up a new mortgage can offset the savings, so careful calculations are essential.
Additionally, new government initiatives or lender products may become available, offering opportunities for certain homeowners to secure favourable terms. Staying informed about market developments is key.[3]
How to Evaluate Your Current Deal
- Check Your Current Rate: Review your existing mortgage terms, including your interest rate and monthly payments. If you’re on an SVR or your fixed rate is about to end, remortgaging could offer savings.
- Calculate Early Repayment Charges (ERCs): If you’re still in the fixed period of your current deal, find out what it will cost to exit early.
- Consider Fees: Take into account arrangement fees, valuation fees, and any other costs associated with remortgaging.
- Assess Your Loan-to-Value (LTV): Your LTV ratio—the amount you owe compared to the value of your property—can impact the rates available to you. A lower LTV often results in better deals.[1]
Opportunities to Save
- Lock in Fixed Rates Early: With uncertainty around future interest rate movements, securing a fixed-rate deal now could protect you from potential increases later.
- Explore Green Mortgages: Some lenders offer discounted rates for energy-efficient homes, providing both financial and environmental benefits.[4]
- Shop Around: Don’t settle for the first offer. Use a mortgage broker to compare deals across the market and find the best fit for your circumstances.[1]
Is Remortgaging Right for You?
Remortgaging isn’t always the best option for everyone. If you’re near the end of your current fixed term or have a high LTV, it’s worth exploring your options. However, if early repayment charges are substantial or market rates aren’t significantly better, staying with your current deal might be more cost-effective.[5]
Seek Professional Advice
Navigating the mortgage market can be complex, particularly in a year marked by economic uncertainty. Consulting one of our mortgage advisers at B Mortgage Services can help you understand your options, calculate potential savings, and ensure you make an informed decision.
By carefully evaluating your current mortgage and the broader market conditions, you can determine whether remortgaging in 2025 is the right financial step for you.
