| Remortgaging is what you do when you switch your mortgage to a new lender without actually buying a new home. |
| Why remortgage? Like millions of borrowers, you probably have a variable rate mortgage. If you don’t have a redemption penalty on your current loan, you could save many hundreds of pounds a year by switching to a better value fixed or discounted loan. For example: |
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| With savings like these to be made, it may be worth switching your loan even if you would have to pay a redemption penalty. You need to work out how much you will save compared with the penalty involved. |
| Are there any costs? You may have to pay an application fee, a valuation fee and solicitors’ fees too. That could add up to £700 or £800, which may wipe out any potential savings from a lower rate if you have a small loan. Some lenders offer special deals for borrowers looking to remortgage to minimise these costs. The rate may not be the most competitive, but it is balanced by benefits such as a free valuation, no application fee, and cashback of £250 or £300 to cover your legal costs. This can work well if you have a small loan. It is worth talking to your own lender before moving your mortgage to find out if they can offer you a better deal. You could avoid some of the costs involved in switching to a new lender. |
| Research the market Take a good look around before deciding where to apply. You may get special remortgage terms from some lenders, but you will also be excluded from some deals that lenders do not make available to borrowers who want to remortgage. These are some of the points to watch: |
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