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Remortgaging could save you money

Don't pay too much for your mortgage


AA Mortgages are provided by Bank of Ireland UK


Why should you think about remortgaging?

No one likes to think they're throwing money away but planning ahead can avoid this. Remortgaging at the right time could save you money. If you're not sure what the right choice is for you, it's best to ask for mortgage advice – AA Mortgages advisers are happy to help.

Is your current fixed-term mortgage due to end?

Usually the interest rate you pay will revert to your current provider's standard variable rate (SVR) when your fixed term finishes. Your provider determines their SVR and it can change at any time.

Currently the Bank of Ireland SVR is 4.49%.1 In comparison, the interest rate for the 2-year fixed-term, 85% loan to value (LTV) AA Mortgage is 1.75%2, with a £1.495 fee.

It's easy to see how you could save money with a lower interest rate. However, there may be other costs to consider when switching your mortgage – these can include redemption fees, product fees and other mortgage application fees.

Moving to your current provider's SVR could increase your monthly payments depending on your situation.

Has your fixed term already ended?

Chances are you're now paying your current provider's standard variable rate (SVR). You could save money by remortgaging to a new deal, as a fixed-term mortgage is likely to have a lower interest rate.

Let's look at an example repayment mortgage of £232,295, with a mortgage term of 21 years on which interest is charged monthly.

If you're paying a SVR of 4.49%, your monthly payments will be £1,425.303. However, if you switched to the 2-year fixed-term, 85% LTV, AA Mortgage product with a £1.495 fee, the interest rate is 1.75%. This means your monthly payments will be £1102.303 for the fixed term, which is a saving of £323 per month during the fixed term.

Will interest rates continue to rise?

While it's difficult to predict if interest rates will go up, it's true that since the Bank of England interest rate increased in November 2017, some mortgage rates have risen. If you're on your current provider's SVR or a mortgage linked to the Bank of England base rate, you may be better off remortgaging and knowing the rate is set for the length of your fixed-term.

Find out more

Take a look at the whole AA Mortgage range and rates, or talk to one of the AA Mortgage team today.


Your home may be repossessed if you do not keep up repayments on your mortgage.


1 Bank of Ireland UK Standard Variable Rate correct as of 12 April 2018
2 AA Mortgage rate correct as of 19 April 2018
3 Source: Bank of Ireland UK. Correct at 11 April 2018. Monthly payments assume any product fees are paid upfront and based on a capital repayment mortgage. Full saving based on 24 months of payment savings and assuming that the SVR paid doesn't change over the fixed-term period.

Important information

Before you apply, read these important documents:

Definitions: a guide to the terms we use

Approval in principle (AIP)
An Approval in Principle, also known as a Decision in Principle will provide you with an indication of what you may be able to borrow, you will be required to provide details of your income and outgoings and a credit check may be requested.
 
Annual Percentage Rate Of Charge (APRC)
This shows the overall cost of borrowing, taking into account the term, interest rate, and any fees or charges to reflect the total cost of the mortgage. You can use it to compare different mortgage offers.
 
Fixed rate mortgage
These mortgages fix the interest rate you pay for an agreed promotional period. They revert to a different variable rate at the end of the fixed period.
 
Loan to Value (LTV)
This is the ratio between the mortgage loan and value of your property, known as Loan to Value, and will affect the range of products available to you. As a rule, a lower LTV will entitle you to lower rates.
 
Loyalty bonus
This is a bonus of 0.1% that is paid every year on the anniversary of the completion of your AA mortgage and is calculated on the outstanding mortgage balance on this date. This can be paid either into the bank account you pay your mortgage from, or it can be applied as a capital reduction to your mortgage balance. This is only available for mortgages applied for after 19th April 2018.
 
Overpayment
This is a sum of money paid to your mortgage account in addition to your normal monthly payment, with a view to paying off your mortgage earlier or to reduce your monthly payments. Please refer to the terms and conditions of your mortgage offer for the limits you are allowed to make without incurring charges.
 
Portable Mortgage
A mortgage that allows you to transfer the interest rate and early repayment charge conditions on your existing mortgage balance to your new property.  This is subject to a new offer being made based upon the lender’s current criteria.  If you don’t need to borrow extra amounts your mortgage product can remain the same.
 
Product Fee
This is a fee charged on some mortgages as part of the product. It can be paid upfront or added to the loan. If you add it to your mortgage it will increase your outstanding balance and interest will be charged for the duration of the mortgage.
 
Representative example
This is an illustration of a typical mortgage and its total cost. The Representative Example is for illustration purposes only and your actual costs and monthly repayments will vary depending on your mortgage.
 
Selected products
Only available on certain products, please refer to the AA mortgage range and rates table, or PDF link on the AA Mortgages website for further details.
 
Standard legal fees
Standard legal fees are basic solicitor fees, which does not include additional legal work or charges that may need to be carried out. For selected purchase / remortgages the lender may pay these fees to your solicitor – please see the Standard legal fees explained document for further details.
 
Standard Mortgage Valuation (also known as Lender’s Valuation) and Valuation Fee
The main purpose of this report is to ensure that the property is worth the amount that you are borrowing. The lender needs to decide whether to lend on the property by assessing its condition and likely value. The Valuation Fee is the cost for this basic assessment to be carried out on a property. You need to be aware that this type of report does not go into great detail about the property's condition and in some cases the lender may instruct an automated valuation, which will not include a site visit and you will not receive a written report. You may want to get a more detailed report so you are fully aware of any structural issues for your own purposes, which will come at an additional cost.
 
Standard Variable Rate (SVR)
A variable rate of interest set by a lender, which many mortgage products change to when their Promotional Period ends. Changes to a Standard Variable Rate are made at a lender’s discretion and are not directly linked to an external rate.

Help and guidance
We want to make sure that managing your finances is as straight-forward as possible. That’s why we have written some guides to help you both everyday or when things aren’t going quite as you’d planned.

Managing your money
Money worries
Bereavement
Redundancy
Caring for others
Divorce and separation

Contact us
All mortgages are subject to status and lending criteria. Written illustrations are available on request.

All mortgages are subject to status and lending criteria. Written illustrations are available on request.

Borrowers must be aged 18 or over.

AA Financial Services Limited is authorised and regulated by the Financial Conduct Authority. Registered Office: Fanum House, Basing View, Basingstoke, Hampshire RG21 4EA. Registered in England and Wales (912211).

AA Financial Services Limited (AAFS) acts as a Home Finance intermediary and introduces customers to Bank of Ireland (UK) plc only as its exclusive Home Finance provider.

Bank of Ireland UK is a trading name of Bank of Ireland (UK) plc. Bank of Ireland (UK) plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.


AA Home Membership is underwritten by Acromas Insurance Company Limited, registered number 88716 (Gibraltar), and arranged by Automobile Association Insurance Services Limited.

Automobile Association Insurance Services Limited is an insurance intermediary which is authorised and regulated by the Financial Conduct Authority. Registration number 310562.

You can check the Financial Services Register on the FCA website.

Registered office: Fanum House, Basing View, Basingstoke, Hampshire RG21 4EA. England and Wales. Company registration number 241412.