Five Signs It’s Time to Review Your Mortgage

Many people take out their initial mortgage deal and then that’s it, they never think to revisit it and it can remain unchanged for years. However, your borrowing needs, personal circumstances or financial position can change significantly over time. A mortgage that suited your previous situation may no longer be the right choice two, three, six or 10-plus years down the line.

Reviewing your mortgage periodically can help you understand whether your current arrangement still meets your needs and whether there are other options worth considering. From changes in income to positive or negative shifts in the housing market, there are five key signs that it is time to review your mortgage.

1. Your Fixed-Rate Deal Is Coming to an End

The end of a fixed-rate period is one of, if not the most common reasons to review your mortgage. Once the initially agreed term finishes, many borrowers will be automatically moved onto their lender’s standard variable rate. This automatic renewal can result in higher monthly repayments and even greater uncertainty as those rates may rise or fall over time. Exploring your remortgage options before your fixed deal expires gives you the ideal opportunity to assess alternative products, better deals, different lenders and get a better understanding of what may be available. Taking action early can also reduce pressure and provide more time to make informed decisions about your next mortgage arrangement and interest rates.

2. Your Property Has Increased in Value

If your property has risen in value since you purchased it, your mortgage position may have improved. As the value of your home increases, the percentage of the property’s value that is covered by your mortgage may decrease. This is known as your ‘loan-to-value ratio’. 

A lower loan-to-value ratio can open up access to different mortgage products and potentially more competitive terms. Reviewing your mortgage after obtaining an up-to-date valuation in line with a house price index, can help you understand whether increased equity has created new opportunities that were not available when you originally took out your mortgage.

3. Your Financial Circumstances Have Changed 

Changes to your current financial situation have the potential to have both positive and negative impact on your mortgage requirements. Various situations can have this effect like, receiving a pay rise, changing jobs, changing careers, going self-employed or reducing your outgoings. Then there are changes to family circumstances and alterations to your long-term financial goals.

After significant events such as those previously mentioned, it could be time to review your mortgage deal to assess whether your existing deal is working in tandem with your circumstances. 

4. You’re Planning Major Home Improvements 

Larger home improvement projects can cost significant amounts of money, so much so that it may only be possible by remortgaging. Building extensions, full renovations, creating home offices, adding in new energy efficiency upgrades or something else similar, can incur vast costs. 

Before undertaking major work on your home, it can be worth taking the time to review your mortgage first, to see if there is any option for equity release or increasing your deal amount to cover the work. Comprehensive considerations should be taken first so that you don’t end up out of pocket.

5. You Want More Control Over Your Monthly Finances 

Many homeowners will review their mortgage simply because they want greater control over their household finances. As living costs, financial commitments and personal priorities regularly change, it can be useful to double-check if your mortgage fits into your monthly budget.

Reviewing your mortgage can help you understand whether your current arrangement remains appropriate and whether there are deals that better match your current and future financial objectives.

A Mortgage Review Isn’t Just About Interest Rates

Although interest rates are an important consideration, they are only one aspect of choosing a mortgage. Other features like having repayment flexibility, allowances surrounding overpayment and general suitability claims can be just as valuable depending on your circumstances.

Financial priorities are sure to change throughout the life of any mortgage, and what has previously worked well may no longer be the right fit for your situation. A thorough review of your mortgage will consider the complete and updated picture to help ensure your mortgage remains aligned with your needs, current market trends and future plans.