HBW KNOWLEDGE / PLANNING
Remortgaging: which option suits your remaining balance?
Renew, switch or lock in terms early: the next mortgage phase deserves a fresh comparison.
Three routes compared
| Option | Meaning | Points to consider |
|---|---|---|
| Renewal | A new interest agreement with the existing lender. | Compare with alternatives for the same outstanding balance. |
| Switching lender | Another lender’s loan repays the existing balance. | Include switching costs, security arrangements and the repayment date. |
| Forward mortgage | Terms agreed now for borrowing starting later. | Check any premium, commitment to draw down and timing risk. |
A forward mortgage is not a non-binding reservation
It can fix future terms early, potentially with a premium. If market rates later fall, the agreed terms generally remain binding. Compare the cost with the certainty your household needs. Available lead times differ by lender.
Prepare for a meaningful comparison
- Confirm the fixed-rate expiry date and expected outstanding balance.
- Have existing contracts, the repayment schedule and any renewal offer ready.
- Separate money for a partial repayment from your cash reserve.
- Update income and your preferred payment for the next phase.
Look beyond the new interest rate
Compare costs up to the same date, including potential switching costs and the remaining balance. Consider whether the financing needs adapting to changed income, family plans or retirement.
Frequently asked questions
Must I stay with my current bank?
You can examine alternatives. A switch must fit a contractually or legally available repayment date and may involve costs.
When should I start?
Keep the expiry of your fixed-rate period in view. With a longer lead time, weigh the security of a forward mortgage against its cost.
What does this mean for your plans?
Discuss your purchase price, own funds and intended borrowing with us.
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