When Should You Start Thinking About Remortgaging?

If your current mortgage deal is due to end in the coming months, it can be tempting to put it to one side until the date gets closer.

After all, if nothing needs to change today, why worry about it now?

The problem is that leaving a mortgage review until the last minute can create unnecessary pressure. Starting the conversation earlier doesn’t mean you need to make an immediate decision or change your mortgage. It simply gives you more time to understand your position and consider what may be appropriate for your circumstances.

What happens when your current mortgage deal ends?

Many mortgages have an initial deal period, such as a fixed or discounted rate.

When that period ends, what happens next will depend on the mortgage you have and the arrangements offered by your lender.

This is a useful point to review your circumstances rather than simply waiting for the end date to arrive.

Your options may include remaining with your existing lender or considering a new mortgage elsewhere. Which route is appropriate will depend on your individual circumstances, so it is important not to assume that changing lender — or staying where you are — will automatically be the right answer.

Why start thinking about it early?

Time gives you room to prepare.

A mortgage review can involve more than simply looking at an interest rate. Your income, expenditure, outstanding mortgage, property, future plans and wider circumstances can all be relevant.

Starting earlier gives you an opportunity to understand what information may be needed and deal with questions before they become urgent.

It can also be particularly useful if something has changed since your existing mortgage was arranged.

Has anything changed since your last mortgage?

A few years can make quite a difference.

You may have changed jobs, become self-employed, started a business, increased or reduced your working hours, taken on additional borrowing or experienced changes within your family.

Your plans for the property may also have changed.

Perhaps you are thinking about moving rather than staying put. You might want to alter the mortgage term, review how the mortgage is structured or simply understand what happens when your existing arrangement ends.

These are all useful things to identify before you start looking at specific mortgage options.

What if you’re now self-employed?

If your employment or income structure has changed since your last mortgage was arranged, allowing more preparation time may be particularly useful.

For example, you may now be a sole trader, limited company director, contractor or CIS worker rather than receiving the same standard salary each month.

That doesn’t determine what mortgage options will be available to you, but it can affect the information needed to understand your circumstances properly.

Rather than making assumptions about how your income will be considered, an early conversation can help identify what information may be relevant before you need to make a decision.

Does reviewing your mortgage mean you have to remortgage?

No.

A mortgage review should be about understanding your circumstances and considering the available options before deciding what, if anything, to do.

Depending on your position, remaining with your existing lender may be worth considering alongside alternatives available elsewhere.

The important part is making a considered decision based on your circumstances rather than assuming that a remortgage is automatically necessary.

What can you prepare before a mortgage review?

The exact information required will depend on your circumstances, but it can be useful to have a clear picture of:

• your current mortgage and when the existing deal ends;
• your approximate outstanding mortgage balance;
• your current income;
• regular financial commitments and borrowing;
• any significant changes since your previous mortgage application;
• your plans for the property and the next few years.

If you’re self-employed or have a more complex income structure, additional information may be needed depending on your circumstances.

You don’t need to work everything out yourself before speaking to an adviser. Identifying what is needed is part of the review process.

So, when should you start?

There isn’t one date that will be right for everybody.

The important point is not to assume that you need to wait until your existing mortgage deal is about to expire before starting the conversation.

Looking at your position ahead of time can give you more opportunity to prepare, ask questions and consider your options without unnecessary last-minute pressure.

A mortgage is a significant financial commitment. Giving yourself time to review it properly may be worth considering.

If your mortgage is due for review and you’d like to understand what the next steps could look like, I’m happy to have an initial conversation about your circumstances.