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Remortgaging in Wilmslow: Equity, LTV and Your Next Mortgage Deal
If you already own a property in Wilmslow and your mortgage deal is approaching its end, it is worth reviewing your position before simply allowing the mortgage to continue onto your lender's follow-on rate.
Your home may be worth considerably more or less than when you originally bought it.
You may have reduced the mortgage balance substantially.
Your income might have increased, you may have become self-employed or started your own company, and your plans for the property could also have changed.
Hi, I’m Oliver. I’m a mortgage broker based in Sale, helping homeowners in Wilmslow and across Cheshire understand their remortgage options.
Whether you simply want another mortgage deal, are considering borrowing more or want to change the structure of your mortgage, this guide explains some of the main things to consider.
What Is a Remortgage?
A remortgage generally means replacing your existing mortgage with a new mortgage from another lender while continuing to live in the same property.
Your current mortgage is repaid and the new lender takes security over the home.
There is another route too.
You may be able to stay with your current lender and select another mortgage product.
That is commonly known as a product transfer.
Your existing lender may turn out to be the appropriate option.
Or moving to another lender may work better.
The point of reviewing the mortgage is to compare both rather than assume either one is automatically best.
You can also visit my Remortgages and Mortgage Broker Wilmslow pages.
When Should You Start Reviewing Your Mortgage?
MoneyHelper recommends starting to review options up to around six months before an existing fixed or discounted deal ends.
That gives you time to understand:
When your current deal expires.
What your existing lender can offer.
Whether another lender may be suitable.
Your current property value.
Your loan-to-value.
Whether your circumstances have changed.
Whether you want additional borrowing.
You do not necessarily have to submit an application six months beforehand.
But starting the conversation early can remove much of the last-minute pressure.
What Happens When Your Current Deal Ends?
If you do nothing, your mortgage will typically move onto your lender's Standard
Variable Rate.
MoneyHelper says SVRs are generally higher than other mortgage products and can change at the lender's discretion.
That does not mean you should always change lender.
Your current provider may offer another product through a product transfer.
But allowing the deal to expire without checking your options can mean missing the chance to review the mortgage properly.
Wilmslow Property Values and Your Mortgage
Recent Rightmove sold-price data puts the overall Wilmslow average at around £519,664 over the last year.
Detached properties averaged approximately £801,771, semi-detached properties around £493,799, and terraces approximately £351,105.
These are broad historical averages rather than valuations of individual properties.
Your home may be worth considerably more or less.
But property value matters when remortgaging because it affects your loan-to-value.
What Is Loan-to-Value?
Loan-to-value compares your mortgage balance with the property's value.
Imagine your Wilmslow home is valued at: £600,000
Your mortgage balance is: £300,000
Your mortgage is therefore approximately: 50% loan-to-value
If you originally bought with a 10% deposit, your position may have changed substantially through a combination of mortgage repayments and changes in the property's value.
Different loan-to-value bands can provide access to different mortgage products.
Example: Wilmslow Remortgage
Suppose you bought your home for: £450,000
Your original mortgage was: £405,000
That was 90% LTV.
Several years later, your mortgage has reduced to: £370,000
Suppose the property is now valued at: £500,000
Your approximate loan-to-value becomes: 74%
That could place you in a different mortgage product range from when you originally bought.
It does not guarantee a lower rate because wider mortgage pricing changes over time too.
But your improved LTV may still be important.
What If Your Property Has Been Renovated?
Perhaps you have made substantial improvements since buying.
You may have:
Extended.
Converted a loft.
Added another bedroom.
Installed a new kitchen.
Completely refurbished.
Improved energy efficiency.
These improvements could affect the property's value.
But spending £80,000 on renovations does not automatically mean the home is worth £80,000 more.
The lender will normally use its own valuation for mortgage purposes.
If the property is materially different from when you bought, mention that when reviewing the mortgage.
Product Transfer or Change Lender?
Staying with your existing lender can sometimes be convenient.
Depending on the circumstances, it may involve fewer checks than applying to a completely new lender.
But convenience should not be the only consideration.
A remortgage to another lender might potentially provide:
Different mortgage pricing.
Different product fees.
A different mortgage term.
Alternative affordability criteria.
More suitable treatment of self-employed or variable income.
The best route depends on the complete picture.
The Lowest Rate Is Not Always the Cheapest Mortgage
Suppose:
Mortgage A has a slightly lower rate but a £1,999 fee.
Mortgage B has a slightly higher rate but no product fee.
Which is cheaper?
That depends partly on the mortgage balance and the deal period.
On a larger Wilmslow mortgage, a rate difference can be significant.
But product fees can still alter the overall cost.
MoneyHelper recommends considering fees and the total cost of switching rather than simply focusing on the advertised rate.
Can You Remortgage Before Your Current Deal Ends?
Potentially.
However, an early repayment charge may apply.
MoneyHelper notes that you can remortgage before the end of a deal but switching costs and early repayment penalties may make it less worthwhile.
Before moving early, I would want to establish:
Current mortgage balance.
Existing rate.
Early repayment charge.
When the charge reduces.
When the fixed deal ends.
Potential cost of the new mortgage.
Sometimes switching early may make sense.
Other times, waiting until the charge disappears may be more appropriate.
Example of an Early Repayment Charge
Imagine:
Mortgage balance: £400,000
Early repayment charge: 2%
Potential cost: £8,000
That is a substantial amount.
The benefit of changing mortgage would need to be considered against that cost.
A lower interest rate alone does not tell you whether switching early is worthwhile.
Larger Wilmslow Mortgage Balances
With detached Wilmslow properties currently averaging over £800,000 in Rightmove's recent sold-price data, some homeowners may have relatively large mortgage balances.
Suppose your mortgage is: £550,000
Even a fairly small difference in interest rate can have a noticeable effect on monthly payments.
That makes a proper total-cost comparison particularly important.
What If Your Income Has Increased?
A lot can change during a five-year mortgage deal.
Perhaps you earned £50,000 when you originally bought. You now earn £75,000
That could potentially improve your affordability if you want to:
Change lender.
Borrow more.
Reduce the mortgage term.
Restructure your borrowing.
But your financial commitments may also have changed.
What If Your Expenditure Has Increased?
Perhaps your income has risen substantially but you now also have:
Childcare.
Car finance.
Personal loans.
Larger household costs.
Dependants.
A new lender will normally assess your current circumstances.
So earning more does not automatically mean mortgage affordability is dramatically stronger.
Bonus and Commission Income
You may now receive a larger proportion of your earnings through bonuses or commission.
For example:
Basic salary: £70,000
Bonus: £30,000
Different lenders can have different approaches to variable income.
If you want to change lender or borrow more, the lender's treatment of that £30,000 could become important.
Remortgaging After Becoming a Company Director
Perhaps you were a PAYE employee when you originally bought your Wilmslow property.
You now run your own limited company.
That does not automatically mean you have to stay with the same mortgage lender.
However, the way your income is assessed will be different.
Depending on lender criteria, company-director income may be assessed using salary and dividends or potentially other elements of company performance.
Read my Mortgages for Company Directors and Business Owners in Wilmslow article if this applies to you.
Remortgaging When Self-Employed
You may now be a:
Sole trader.
Contractor.
Consultant.
Freelancer.
Partner.
Company director.
Different lenders can assess self-employed income differently.
Your trading history, accounts and income trend may therefore influence which remortgage routes are available.
My Self-Employed Mortgages page explains this in detail.
What If Your Own Lender Offers a Product Transfer?
That may be a good option.
The point of speaking to me is not to move your mortgage just for the sake of moving it.
Sometimes staying with your existing lender is entirely sensible.
We can compare staying against switching and consider the cost, flexibility and suitability of each route.
Can You Borrow More When Remortgaging?
Potentially.
You may want additional borrowing for:
An extension.
Loft conversion.
Major refurbishment.
New kitchen.
Other home improvements.
Another financial objective.
The lender will need to assess both the new loan-to-value and affordability.
Having substantial equity does not automatically mean you can borrow the full amount of it.
Example: Raising Money for Improvements
Imagine your Wilmslow home is valued at: £650,000
Mortgage remaining: £300,000
You want: £75,000 additional borrowing
New mortgage: £375,000
That would represent approximately: 58% loan-to-value
From an equity perspective, the position may look strong.
But the lender still needs to be satisfied you can afford the £375,000 mortgage.
Improve or Move?
You may be deciding whether to extend your existing Wilmslow property or move to somewhere larger.
Both have financial implications.
Moving may involve:
Estate-agent fees.
Legal fees.
Moving costs.
Tax where applicable.
A larger mortgage.
Improving the existing property may involve:
Building costs.
Temporary disruption.
Additional borrowing.
Planning considerations.
Longer-term mortgage cost.
A remortgage review can help you understand the borrowing side before deciding which route you prefer.
Debt Consolidation
Some homeowners consider raising mortgage borrowing to repay unsecured debts.
This needs careful consideration.
A lower monthly payment does not automatically mean the borrowing is cheaper.
You may be turning previously unsecured debt into borrowing secured against your home and potentially repaying it over a much longer period.
The long-term cost and risk should be considered carefully.
Could You Shorten the Mortgage Term?
Perhaps your income has increased since you bought.
Rather than reducing your monthly payment, you may decide that your priority is paying the mortgage off sooner.
For example, you might have 22 years remaining and decide to remortgage over 15 years.
That would normally increase the contractual monthly payment but reduce the period over which interest is paid.
The right term should fit your financial plans rather than simply defaulting to the existing one.
Or Extend the Term?
You may instead want lower monthly payments.
Extending the mortgage term can reduce the contractual repayment.
However, keeping the mortgage for longer can increase the total interest paid.
This trade-off is particularly important on larger mortgage balances.
What If You're Planning to Move From Wilmslow?
This should influence your mortgage decision.
Perhaps you are considering moving to Knutsford, Alderley Edge or somewhere else within the next couple of years.
A long fixed mortgage with substantial early repayment charges may reduce flexibility.
A mortgage may be portable, but moving it to another property is generally subject to the lender approving the new application.
Think about your property plans before committing to the next mortgage product.
Wilmslow to Knutsford
This is another natural link within your website structure.
Someone who currently owns in Wilmslow may later look towards Knutsford.
If moving is genuinely likely during the next mortgage deal, the ability to port and the early repayment charge structure may become particularly relevant.
Visit my Mortgage Broker Knutsford page if that move is on your radar.
What If the Lender Values Your Home Lower Than Expected?
Suppose you believe your property is worth £700,000 with a £420,000 mortgage. That would mean approximately: 60% LTV
But the lender values the home at: £650,000. Your loan-to-value would instead be around 65%.
That might affect the mortgage product available.
Estate-agent estimates and online valuations can be useful starting points, but the lender's own valuation matters for the mortgage.
Should You Review Your Protection Too?
A remortgage review can also be a natural point to revisit your financial protection.
Since you originally bought, you may have:
Had children.
Increased your mortgage.
Changed jobs.
Become self-employed.
Increased your income.
Changed your household finances.
Existing life insurance, critical illness cover or income protection may no longer reflect your current financial commitments.
Visit my Protection page for more information.
Common Wilmslow Remortgage Mistakes
Waiting Until the Mortgage Deal Has Already Ended
Starting several months beforehand gives you more time.
Automatically Accepting the Existing Lender's Deal
It may be suitable, but compare your options.
Changing Lender Just for the Sake of It
Staying may sometimes be the better route.
Looking Only at the Interest Rate
Fees and total cost matter too.
Ignoring Early Repayment Charges
These can materially alter the calculation.
Assuming the Property Value
The lender's valuation may differ.
Borrowing More Because Equity Is Available
Additional borrowing still needs to be affordable.
Extending the Term Without Considering Long-Term Interest
A lower payment may mean more interest overall.
Forgetting Future Moving Plans
A new fixed deal can affect your flexibility.
Wilmslow Remortgage FAQs
When should I start reviewing my mortgage?
MoneyHelper suggests beginning to shop around as early as around six months before your current fixed or discounted deal ends.
What happens if I do nothing?
You will normally move onto the lender's Standard Variable Rate, which is usually higher
than other mortgage products.
Do I need to change lender?
No. A product transfer with your current lender may also be worth considering.
Can I remortgage as a company director?
Potentially. The lender will need to assess your current company income according to its criteria.
Can I remortgage after becoming self-employed?
Potentially, subject to income evidence, affordability and lender criteria.
Can I borrow more?
Potentially, depending on your property value, income, commitments and loan-to-value.
Does my Wilmslow property value matter?
Yes. It helps determine your loan-to-value and can influence the mortgage products available.
Can I remortgage before my current deal ends?
Potentially, but an early repayment charge may apply.
Is the lowest mortgage rate automatically the best deal?
No. Fees and the total cost should be considered as well.
Should I remortgage if I plan to move soon?
That depends on the product's flexibility, early repayment charges and portability.
How I Can Help
If your Wilmslow mortgage deal is approaching its end, we can review your current position before deciding what happens next.
That means looking at:
Existing mortgage balance.
Current rate.
Deal end date.
Early repayment charges.
Property value.
Loan-to-value.
Current income.
Company-director or self-employed income.
Financial commitments.
Additional borrowing requirements.
Mortgage term.
Future moving plans.
From there, I can help you compare staying with your current lender against alternative
mortgage options that may be available.
Is Your Wilmslow Mortgage Coming to an End?
You do not need to wait until the final few weeks.
Starting early gives you time to understand your options and make a considered
decision.
Whether you simply want another mortgage deal, are thinking about borrowing more or your financial circumstances have changed completely since your original mortgage, feel free to get in touch.
Oliver Smith Mortgage Broker
Website: www.oliversmithmortgagebroker.co.uk
Telephone: 07728 511059
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