Remortgage Quote

Remortgage types

• Discount remortgage rates
• Fixed remortgage rates
• Variable remortgage rates
• Capped remortgage rates
• Flexible remortgage rates

Discount Remortgage Rates

In today's competitive environment, many providers offer an initial discounted rate. This takes the form of a limited period reduction in the normal variable interest rate by, say, 2% for a year. This means that whatever the variable rate is during that initial year, the borrower will pay 2% less, thus making a saving. At the end of the discount period, the rate reverts to the lender's prevailing variable mortgage rate.

Fixed Remortgage Rates

With fixed rate remortgages, the borrower can lock into a fixed repayment cost each month over an agreed period of time and know that, irrespective of changing rates of interest, monthly payments will not be affected. The longer the fixed rate period, the higher will be the fixed interest rate. Fixed periods of one to five years are the most popular and most readily available. At the end of the fixed rate term, the interest rate usually reverts to the lender's prevailing variable mortgage rate.

Variable Remortgage Rates

Variable remortgage rates have been available for many years. As the name suggests, the monthly repayment goes up and down in line with the lender's mortgage rate. This means that you cannot predict the monthly cost of the mortgage from one year to the next. This can cause major budgeting problems in a period of increasing interest rates. On the other hand, when interest rates fall, there is less to pay. Many lenders do not alter the rate for existing borrowers until the year-end. With interest rates used as a regulator for the economy, mortgage rates change frequently.

Capped & Collard Remortgage

A capped and collared remortgage is a variable rate remortgage which has a fixed upper rate limit (the cap) and a fixed lower rate limit (the collar). This means that the borrower knows in advance the highest and lowest monthly payments that he may have to make. For example, if cap and collar rates are fixed at 5.75% and 3% respectively, the loan will be charged at the prevailing variable rate as long as this is not more than 5.75% or less than 3%.

Flexible Remortgage

A truly flexible remortgage allows you to make overpayments and underpayments, borrow back overpayments and, if you have built up enough credit, to take payment holidays. Another important feature is that interest is calculated monthly/daily, not annually in arrears, so overpayments have an immediate impact on what interest you pay. You can, therefore, significantly reduce the term of the loan and save thousands of pounds in interest payments if you are able to make additional payments during the term of the mortgage. A flexible remortgage can be ideal for people with inconsistent income, like the self-employed. And since some remortgage deals come with cheque books and debit cards, you could even use your mortgage as a bank account.

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