Fix, Track or Switch? Your Guide to Remortgaging

life stage affects your options, we've got you covered. I'm thrilled to welcome back friend of the show, Sarah Tucker, better known as The Mortgage Mum. As a qualified advisor, podcast host and trusted voice in the mortgage space, Sarah has helped thousands of people feel more informed and empowered about their financial decisions, whether they're buying their first home,

remortgaging or planning for the future. Sarah, welcome back. It's great to have you with us.

date, whether that's two years, five years, 10 years. And remortgaging is when you're coming up to the end of that date, we are going to put you onto a new deal.

two years or five years. And in 2022, we saw a huge increase in the swap rates after Liz Truss made an announcement, which is quite infamous in our industry now as a pivotal moment where we saw rates increase dramatically. They have come down quite a bit since then, but they're still a lot higher than they were in the COVID cheap times. We are creeping towards our new normal in the rate market, and so in terms of

a remortgage, it's about timing. Some people had incredibly difficult timing where the rates were very, very high and they

were coming off those cheapest rates. But the good news is anyone that's looking for a remortgage now, or in the next year or two, should not have as much of a shock, and may even have a decrease in their rate if they're someone that remortgaged two years ago when things were very difficult and may be coming off of those very high rates onto a slightly better one.

So we've got all sorts of scenarios on our desks at the moment.

that there's no flexibility or little flexibility. So if you want to move house or you want to sell the property, you are going to pay an early repayment charge unless you take the mortgage with you. The tracker rate environment is becoming more popular now because we're hearing reports of the Bank of England base rate reducing. They've reduced it a few times already this year, and investors think

that they will do it more than 2025. So those people on a tracker rate immediately benefit because their rate tracks the Bank of England base rate. So if it goes up, it goes up, and if it comes down, it comes down with it. The great thing with the tracker rate is it's flexible. So just to put it in perspective for myself, I've come up from my remortgage and I thought, " I think I'm going to move in the next two

years. I don't know when, but I think I'm going to." So I've done a tracker rate mortgage and I also feel confident in the market, so I am happy to take that risk, but there are people out there that wouldn't be happy to risk the fact that their monthly payment could go up as well as down. But for

me, because of my moving situation, it makes sense. For anyone trying to decide to fix or not to fix, I would be looking to ask them some questions such as, do you think you'll move in the next few years? Is there any big changes ahead that perhaps a fixed rate might limit you in flexibility- wise? What is

your attitude to risk? Let's talk about how much room you've got, wiggle room, in terms of your monthly payment and how you'd feel if the rate went up a little bit or down. So it's all about talking to people about the life around the mortgage and that's how we decide if it's fix or not to fix.

not leave for that period of time." And relationships break down, all sorts of things can happen. Well, I'll touch on the childcare one, if you have a baby, because that's an easy answer. You can still remortgage if you're on maternity leave, if you've had a child. If you've had a change in income, we're going to obviously look at your application fresh and we'll say, " What are you earning

now? What's your situation now?" We'll look at your mortgage affordability and you have two choices always. One is to remortgage away from your lender, and the other is to stay with your lender and just switch the product. Switching your product has a lot less underwriting and a lot

less of a process. So some people opt for that for ease, but it's good to check the rest of the market to make sure that you're with the best

lender. But certainly if you've had a big life change, I think it's just reassuring for people to know they can stick with their current lender if they don't want to go through the underwriting and perhaps feel a bit anxious about doing so. Any change in your income obviously will affect your ability to pay your mortgage potentially, hopefully for the better. For most people it's for the better.

But I think for people worrying, what we see is a lot of people don't ring their bank. They don't switch the rate. They go onto what's called a standard variable rate. They pay a lot more money and they don't talk to us because they're worried. What if I talk to an advisor, and then they tell me I can't have my mortgage and they take my house away? That is not going to happen. So my biggest message is,

go and speak to... Hopefully the advisor you used in the first place is the one to contact you six months before your rate ends, and just tell them what's going on right now for you, what's happened in the last few years and let them guide you through.

the norm. Yes, the rates have gone up, but you don't just need to sit and let it fall onto your rate, and there's no judgment if you do. Just pick up the phone, decide today that you're going to change that and look into it.

rates. So if you look at it six months before, the benefit of that is, you know your worst case scenario. You know you're sorted. You know it's organized, and then it's up to your advisor to just check the

rate movements for you. And we have great tech in the background that does it to help us, that will constantly check our pipeline of clients to make sure they've got the best rate because the rates are always moving. So six months before is going to give you time to do that. It does take people a while to

get their paperwork together. We're busy. We're busy people. Getting your payslips and your bank statements together, it's a pain for people, but it's well worth doing. It's like that annoying job you keep putting off. Once you get started, downloading your PDFs, logging into your bank accounts, it's not as bad as it seems and you do feel really empowered, because I think a remortgage is a really good

little life review, to be honest. How's it going? How's your budgeting going? Have you got any savings? Can we shorten the term a bit? Could we pay a little bit more off a month? It's a really great time to go, "How are we... Yeah, we've (inaudible) property."

industry to know if prices have come down. I know they went up hugely for people doing extensions, but we are seeing a lot more people, yes, remortgaging to improve their home or even to consolidate debts. Just being a bit more creative with the remortgage process, looking at it as a financial review and seeing what opportunities there might be in that process.

paying your mortgage off, whatever. It doesn't matter. As long as I can afford it, I want to keep growing, getting a bigger property or being aspirational." And there are other people that are like, " I just want to feel secure. I want to know this is mine. I don't want someone to be able to take it away from me." For those people, I think if you're making overpayments, just make sure you're keeping

within the realms of possibility for your mortgage. So some lenders let you make unlimited overpayments, some don't. Some say, " 10%, then you'll get charged." How dare you for paying off your mortgage? And if you do come into a windfall of money and you want to pay off your mortgage, your early repayment charge will still apply. So you think, "

I'll win the lottery. I'll pay my mortgage off." Well, you might want to wait until the end of your early repayment charge. You might not care. It depends how much you win. But it's just a personal decision always. Obviously, paying off your mortgage is our job to try and get people to do that, work towards that day

where you're mortgage free, whatever that means for you. But speaking really openly, I think there are other ways to use your money as well, and I'm not an investor and I'm not promoting investment products, but you can invest your money in stocks and shares ISA, and that might grow better than saving on your mortgage rate. And we're seeing

a bit more of that as well. Bit more of that entrepreneurial mindset when it comes to movement of money, buying further properties, thinking about retirement differently. It's not just about adding to your pension anymore. People are like, " How can I retire differently and what does that need to look like?" And of course, pensions are important. I really encourage people to really educate themselves in their own scenarios.

I've done it myself where I say, " I want this much month to month when I retire. I'm retiring at this age. What would I need to put into my pension pot? I'm 40 years old." And it's great because it gives you a bit of a frame of reference. Obviously a financial advisor will do that even better. So it's about thinking about your own personal goals and it's

all too easy. I was someone that just like, oh, yeah, pension, oh, retiring, paying off your mortgage, it's years away. It's so many years away, but the years go quickly and it's really important to think ahead, and it's actually empowering in its own way and exciting in its own way.

money. They're not releasing equity for that money. They're just paying more for the same borrowing. For people to just lose hundreds of pounds a month, it's not nice. And for some people, whilst on paper they can afford it, that creates a huge amount of stress and anxiety because we all tend to live within our means and we

get used to the money we have. So our job has been and continues to be looking at that monthly budget with someone, with a third party perspective and saying, " Okay, you've got seven subscriptions. Is there any of those we can let go of? Have you reviewed your energy bills? Have you spoken to other providers?" Some people, they are used to having a car, for example, or a

second car. And it is challenging to challenge people on what their normal is in a really kind but affirmative way because ultimately we're just trying to show them that there are tweaks that can make, and you can often make a percentage change on your budgeting if somebody just has a look at it with you and says, " Could we do this?" Now, practically, if we've done that and

we've exhausted all the options there, and you're still saying to me, " I'm worried about this, I can't do it." We can look at your mortgage term and we can extend it. So just as people shorten it, people do extend it, if they're on maternity leave, or they've got reduced income, or they've been poorly, or just simply that

they don't feel comfortable with the new rate. As long as we're talking about, okay, well, by adding that time on you're going to pay more over the long run, and we've explained all of that, it's our job to keep reviewing that. The idea is that, again, in five years, maybe when the children are older or they're in a

different position, we can reduce the term again. So it's our job to really flex and bend with our clients. Yeah, I would say if you are someone, and probably you're in the majority, less people worrying about how can I pay my mortgage off, more people are worrying about the interest rates increasing, then just make sure you're getting the right advice.

help. And as always, use an advisor. Use someone that you trust to have an open conversation with, and if you are worried about something, say it. It is just as much an emotional advice service as anything else. So just make sure you feel comfortable enough to say that to the person that's dealing with your remortgage. And the other tip, I would say, is don't just go to your

bank or building society. Don't be tempted to just switch your rate. Look at what else is on the market because you might be surprised at how different it could be.

up with the show on YouTube, TikTok and Instagram, @ legalandgeneral. Until next time, happy house hunting and see you soon.