The number of borrowers switching deals has trebled in
last few years. This has happened principally because of
four factors or reasons:
Ease of switching
The streamlining of legacy processes and the increasing
role that technology has to play in the conduct of financial
services business means that it is now easier to switch
mortgages than at any point in the past.
Save money
A gradually increasing financial sophistication amongst
the UK public has meant that people are slowly waking up
to the savings remortgaging a property can achieve in terms
of monthly outgoings. The temptation of saving hundreds
or even thousands of pounds each year is enough for many
people to abandon their high-interest Standard Variable
Rate and switch to a more competitive deal.
Raise capital
Soaring house prices have left many homeowners sitting on
a large amount of equity. Releasing some of this equity
can be one of the cheapest methods of gaining large amounts
of secured loan finance. Assuming you stay within the permissible
Loan-To-Value range, then if you remortgage your property
for a sum that is greater than the amount needed to repay
the original mortgage, then the borrower gets to keep the
difference. For many people, this can be the best way of
paying for DIY projects, a new car, school fees or some
other major expense.
Changing product type
A reasonable number of people remortgage in order to change
product type. It may be that they wish to move to a current
account mortgage, or perhaps get rid of a poorly performing
endowment. Remortgaging gives you all the same choices as
if you were taking out a mortgage for the first time.
