variable
rate
remortgage
As interest rates remain low, a Variable Rate
Remortgage
could be the
right
remortgage
product for
you. If you
have found
the perfect
home but
need
reassurance
regarding
which
remortgage
product to
select then
researching
for this
particular
type of
remortgage
is very
simple. As
the market
for variable
rate
remortgages
have
increased,
the
competition
has
therefore
grown and
the amount
of deals to
choose from
has
increased
rapidly.
A variable
rate
remortgage
is simply a
loan that is
issued by a
lender that
is secured
against a
form of your
property.
The variable
rate related
to the
interest
rate that
the lender
uses to
charge you
interest.
This part is
calculated
using the
Bank of
England base
rate. The
base rate is
currently at
one of the
lowest
points it’s
ever been
and
therefore
variable
rates that
are set by
lenders are
also at
their
lowest. This
is due to
lenders
having to
set their
rates around
the Bank of
England
rates.
As variable
rate
remortgages
tend to have
lower
interest
rates, it
has made
them a
popular
choice in
more recent
times;
however, the
downside is
that the
remortgage
rate can be
changed at
any time. If
the Bank of
England
decided to
increase
their base
rate at any
time, the
variable
remortgage
rate would
also rise.
Therefore,
although you
will
typically be
paying less
for your
remortgage,
if the rates
were to
increase,
your monthly
remortgage
repayments
would also
increase due
to the
fluctuation
of interest
rates.
However, the
advantage is
that if
there was a
reduction in
the base
rate, the
variable
remortgage
rate would
decrease
which in
turn would
reduce your
monthly
remortgage
repayments.
When you
have found
the property
that you
wish to
purchase, it
is often
best to do
some
research
regarding
the variable
rate
remortgage
available to
you. With
the
introduction
of online
banking,
banks are
competing
against each
other
through the
internet as
well as on
the high
street.
There are
also
specialist
loan
companies
that have
been set up
through the
internet who
are also
targeting
the
remortgage
market with
their own
products on
offer.
If the
amount of
information
available
seems
daunting and
you are
unsure of
where to
start
researching
it’s often
worth
checking
with a
financial
advisor
first. You
can use the
advisor that
can be found
in your
local banks
branch. They
will be able
to discuss
all the
relevant
details and
provide a
further
insight into
the finer
details of
this type of
remortgage.
If you are
experienced
in the
remortgage
market or
just know
exactly what
you are
looking for,
online
applications
are very
welcome from
lenders,
which not
only saves
you and the
lender time
but you will
usually be
given an
immediate
response
with regards
to
acceptance.
When
applying for
a variable
rate
remortgage,
you may be
eligible to
borrow 90 to
95% of your
homes value
depending on
lender and
which
product you
have chosen.
Your
application
will be
based on
your income
of which if
you are a
sole
applicant,
you can
potentially
borrow 3.5
times your
salary or
more
depending on
lender. If
you are
applying in
joint names,
the lender
could
potentially
loan you
either 3
times your
joint income
or more
depending on
lender.
All
remortgage
applications
will be
based on
your credit
history. All
financial
institutions
perform
mandatory
credit
checks on
people
applying for
remortgages.
This
provides the
lender with
the ability
to assess
the risk to
them when
lending you
the money to
secure the
remortgage.
They will
look at
personal
details such
as monthly
outgoings,
employment
history and
any
outstanding
debt you may
have.
There is
often no
redemption
penalties
associated
with
variable
rate
remortgages,
if you move
and want to
remortgage
to another
lender or if
you repay
your
remortgage
earlier than
the set
term, you
will not be
charged for
doing so.
This is a
real
advantage as
many other
types of
remortgage
product will
impose
strict
penalties
for repaying
the
remortgage
earlier than
the agreed
term.
back to home
page
