How to Remortgage your Home

Remortgaging advice & options

Options when remortgaging

While standard variable-rate mortgages are not the cheapest option in the long run, many lenders offer discounts to new customers for the first few years of the mortgage term. An average discount would be a 2% reduction in interest rates for 2 years. This means that if you were previously paying 6% for a mortgage of £100,000 and you remortgaged for 4% you stand to save roughly £1,400 a year in interest payments.

Therefore, while it may seem like a bit of a hassle to remortgage, it can end up saving you a lot of money.

Remortgaging to a fixed rate

A fixed-rate mortgage will mean that you have set monthly payments that you must make each month. They will not go up and down, meaning that you can budget effectively and not have to worry about any sudden interest hikes.

As interest rates are so low at the moment, a fixed-rate mortgage deal may be extremely good value in the long run.

The longer your mortgage term is set out for, the more interest that you will have to pay. If you need to cut costs in the short term, lengthening your mortgage contract may be an option, but you have to consider that in the long run you will be paying back thousands of pounds more than if you kept your mortgage term at its original length.

Risks of Remortgaging

If you want to remortgage, you should check that the mortgage that you currently have is not already on a special deal such as a discounted or fixed rate. If you are already on a deal then you may have to pay a penalty for remortgaging. This can be thousands of pounds, so, if this is the case, it will probably not be cost-effective to remortgage.

Get advice on remortgaging from a mortgage expert

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