When you remortgage, you are switching your mortgage to another deal, and frequently, another lender.
Remortgages can be used for various reasons. However, most people simply switch mortgages because it will work out cheaper for them. For example, the introductory discounted/fixed interest rate may have finished with your current lender; therefore you could potentially get a new discount rate, or a lower APRC, with another lender. Another example is when you may need to re-mortgage to consolidate debts.
It is worth noting that a remortgage is not the best option in all cases. Even if the lender you are considering switching to is offering a lower APRC, you must take into consideration the facts that:
- The new lender may charge you for valuation and solicitors fees, even if you have already paid these for your mortgage with your current lender.
- If you switch mortgage remember to look at the overall repayment period. You may be able to pay less monthly, but check the final repayment date of the mortgage as well.
Also you may be able to switch your mortgage deal with your current lender, avoiding any unnecessary costs. Many lenders will allow you to switch your mortgage deal reasonably frequently.
If you are consolidating debts and securing them against your home you are likely to increase the term over which they are paid and therefore increase the overall amount payable.
You may have to pay an early repayment charge to your existing lender if you re-mortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage. Your existing lender may require an early repayment charge if you remortgage. Think carefully before securing other debts against your home. When consolidating debts the new mortgage may have a longer repayment term and therefore increase the total amount payable.
We charge a fee of £250 for mortgages over £150,000 / £500 for mortgages between £75,000 and £150,000 and £750 for mortgages under £75,000. We only charge if we are successful in obtaining a mortgage offer for you and our fee is payable on receipt of that mortgage offer.