Looking to remortgage? Don’t assume you have to wait until your existing deal finishes before you can start the ball rolling.
If you’ve spotted a mortgage deal you really want, or you’re concerned that fixed rate deals are edging up and want to lock into a low rate now, it is possible to secure a new deal even if you’re currently tied into another mortgage.
Many remortgage offers are valid for between three and six months from the date they are issued. That means even if, for example, you’ve got five months left to run on your existing deal, you can apply for your new mortgage now. Provided your application is accepted, you can arrange with the lender for it to begin as soon as your current deal finishes.
The advantage of working out which deal you want to move to in advance is that you can then go straight from one deal to another, without having to move onto your lender’s standard variable rate. Standard variable rates tend to be much higher than other mortgage rates, so the sooner you switch to a different deal, the more money you will be able to save.
The other main benefit is that you can lock into a particular rate now, so that even if rates start to increase as you approach the end of your current deal, you’ll have peace of mind that you’ve already secured the rate you’re going to move onto.
Bear in mind that lenders take different approaches to how far in advance they will give you a mortgage offer, so make sure you’re clear on exactly when any deal can start before you apply.
For example, some lenders’ remortgage offers will only be valid for three months from the date the offer was first made. Other lenders, however, will start the clock ticking from the point you make your application, while some have specific completion deadlines in place. You may also find that lenders have different offer periods depending on whether you are purchasing a property or remortgaging, so check how long you’ve got before you apply.
If you need help, seek advice from a mortgage broker who will be familiar with how long various lenders’ offer periods are, and can recommend which deals are likely to suit your individual circumstances.
Remember that although forward planning can be useful, you shouldn’t start looking for mortgages too far in advance. The longer the timeframe, the more limited the choice of lender will be, which could impact on the rates that are available to you.
As a general rule, it’s a good idea to start investigating which deals are available up to six months before the end of your mortgage deal is due to finish, particularly if you are worried about rates rising in months to come.