In this brief guide, we are going to talk about the best remortgage deals with no fees and how you can put yourself in a good position to get these types of remortgages.
With over 4 in 10 mortgages now with no fees, we can see how this topic is in demand.
We will look out how you can get the best remortgage deals with no fees when comparing low fee mortgages.
Most remortgage deals have some free items which will normally be charged if you were getting a normal mortgage. These are things such as mortgage arrangement fees, property survey fees and in some cases legal fees.
When getting a remortgage most mortgage lenders would prefer to offer you some discounts in order to retain you and encourage you to keep your mortgage with them or attract you from another mortgage lender.
There are therefore many fee-free remortgage deals on the market but when comparing remortgage deals you have to take into account the actual suitability of the mortgage and not only the fee-free discounts. If you are struggling to get your head around what may be a better remortgage deal then using a remortgage broker may help you.
What is a fee free mortgage?
A fee free mortgage is a mortgage which does not charge any of the typical fees associated with mortgages.
These fees could be mortgage booking fees, mortgage arrangement fees, legal fees, property survey fees, mortgage valuation fees etc
Fee-free mortgages are normally associated with remortgages as mortgage lenders try to compete for borrowers who are already making mortgage payments and have passed a mortgage affordability assessment already.
A fee-free mortgage does not mean you’re not charged any interest on the mortgage.
There are also low -fee mortgages which offer similar benefits to fee-free mortgages.
What is a fee saver mortgage?
Fee saver mortgages are very similar to fee-free mortgages. They have a reduction or total discount on the mortgage fees which are usually associated with opening mortgage accounts such as the mortgage valuation fee, the completion fee, the mortgage booking fee etc.
How can I get a better mortgage deal?
To get a better mortgage deal you should do the following:
Use a mortgage broker: some mortgage brokers have access to exclusive mortgage deals
Build your credit score: building your credit score will enable you to possibly access cheaper mortgage deals.
Put a good mortgage deposit down: An increased mortgage deposit means your loan to value rate drops and this could mean you are able to access cheaper mortgage rates.
Buy a standard construction property: buying a non-standard construction property could mean that the mortgage rates you are eligible for are much higher than normal.
Best remortgage deals with no fees
When looking to compare the best remortgage deals with no fees it is good to start by asking your current mortgage lender. In most cases, your current mortgage lender may be willing to offer you remortgage deals with no fees which aren’t even on the market or a further discount than you may have seen advertised.
Mortgage brokers will also usually have access to remortgage deals which are exclusive to them and this remortgage deals could come with now fees or low fees.
You can also check a remortgage comparison table to find the best remortgage deals with no fees but as mentioned above these tables may not be a true reflection of the current remortgage market and using a mortgage broker who can access the whole of market and search for the best remortgage deals with no fees will be a good idea.
When looking at a remortgage comparison table you will see the mortgage rate which could be a fixed mortgage, a tracker mortgage or a variable rate mortgage. You will also see the current interest rate on the mortgage. The interest rate shows you the overall cost of the remortgage including the fees involved.
You will also see the representative example on the remortgage.
Finally you will see the fees involved with the remortgage. This could be mortgage arrangement fees, mortgage valuation fees, property survey fees etc You can either add these remortgage fees to your mortgage or pay them upfront.
Adding these remortgage fees to your mortgage will of course make the fees much more expensive as they will incur interest on them over a longer period.
Seeing low fee remortgage deals or no fee remortgage deals is quite common as most mortgage lenders will look to entice mortgage borrowers to their platform.
When comparing the mortgage deals it is better to use the APRC rather than comparing remortgage deals simply on the fees. The APRC takes into account the complete cost of the remortgage.
This, therefore, means that remortgage deals with high fees could indeed be cheaper as they may have a lower APRC than a remortgage deal with no fees.
In reality, low-fee mortgages and no-fee mortgage ten dot have much higher interest rates to compensate for the reduction in fees and in some ways can be seen as a simple marketing ploy with no real benefits.
Should you get a low interest mortgage or a no fee mortgage?
The mortgage you get should be based on the total cost of the remortgage to you rather than simply comparing the fees. As mentioned above the APRC is the main comparison factor which gives a guide on the total cost of the mortgage.
It was made for this exact reason: so mortgage borrowers or those looking for a remortgage would be able to compare the remortgage deals in front of them equally.
But an important factor in your decision making would be if the mortgage fees are to be paid with the mortgage or upfront.
If the mortgage lender requires the mortgage fees to be paid upfront and you don’t or can’t afford these fees but the total cost of the mortgage is the best remortgage deal for you then you should consider weighing up what the cost of adding the mortgage fees to the mortgage would be in interest repayments for you and then make a decision.
In some cases, it may be worth adding the mortgage fees to the remortgage if the mortgage lender allows you to and then going on to overpay your mortgage in the first few months in order to reduce the effect of adding the mortgage fees to them.
If the mortgage lender does not allow you to add the mortgage fees to your remortgage then you should consider if the next best remortgage deal where you can afford the mortgage fees or where the mortgage fees are not being charged or being added to the remortgage are suitable to you.
Mortgage fees can cost up to £1500 plus in some cases and hence can be a very hefty upfront payment to make. If adding the mortgage fees to your mortgage ends up being as competitive as other remortgage deals on the market then you should consider this.
You should also consider what adding the mortgage fees to your mortgage will do to your monthly mortgage repayments and if this is something you can afford to repay over a few years at least.
If your mortgage has an initial fixed introductory period then this could give you even greater security that your monthly mortgage payments will say the same even if they are slightly more than you first anticipated and planned for.
Standard variable rates can switch at any time and this means your monthly mortgage repayment could go up or down. If the rate is the mortgage lenders standard variable rate then this could go up or down at any time but if it tracks the Bank of England’s base rate then you would expect a bit more stability.
Once your mortgage introductory period is over and you move over to the mortgage lenders standard variable rate mortgage then you may want to consider another remortgage if your mortgage affordability has improved (example property prices have risen and you now have more equity in the property which could qualify you for a lower loan to value and hence cheaper mortgage rate than you are currently paying).
Getting the best remortgage deals with no fees which are still suitable to you could be a very complex decision and this is why using a mortgage broker could be very valuable.
Example of no fee remortgages
There are many examples of remortgage deals on the market with no fees. so please check with the respective mortgage lenders for their up to date rates.
Using a Fee free mortgage broker
You may want to consider using an independent mortgage broker to get a mortgage.
Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases. This could be over 11,000 mortgage products. This may have some advantages than going directly to a mortgage lender.
A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you.
After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your remortgage is indeed a possibility before you make a full mortgage application. Once you have found a home you want to buy or are satisfied with the mortgage offer for your remortgage then the mortgage broker will then look to get you a mortgage offer.
This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.
If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer. Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it, they will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.
In this brief guide, we discussed the best remortgage deals with no fees and how you can put yourself in a good position to get these types of remortgages.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.