Why Pay Over the Odds?

When you finish your mortgage deal with your current lender (e.g. at the end of a five year fixed rate), unless have redemption penalties, it is possible to move your mortgage to another lender, without moving house.

Why Would I Want To Do This?

There are a number of reasons:

If your deal ends, you will revert to the lenders "variable rate".  This is normally a higher rate.  So by switching lenders, you can save money, cutting your monthly mortgage costs.  By remortgaging on a regular basis, you can save a lot of money.

You may wish to raise additional money, by increasing your mortgage.  This could be for a variety of reasons: home improvements, debt consolidation, second home, school fees, divorce settlement, car purchase, etc. Raising money on your house is cheaper than forms of unsecured lending (such as credit cards and personal loans).

You may have a potential shortfall on an endowment or other repayment vehicle.  Unless you take action, you may have a shortfall, and be unable to repay the mortgage at the end of the term. One solution, is to convert part of the mortgage to repayment, to ensure it is repaid, and you don't have to rely on the repayment vehicle.

Repay your mortgage more quickly by moving the mortgage to a flexible mortgage.  By arranging to overpay, you can pay the mortgage off early, saving on interest payments, and sometimes reducing the term of the mortgage.

How Much Does It Cost To Remortgage?

Remortgaging has many of the fees normally associated with a mortgage.  There are legal fees, as the mortgage has to be transferred from one lender to another.  The property needs to be valued. There may be arrangement fees payable, depending on the remortgage deal.  Your existing lender may make a charge for you moving your mortgage.  Remortgages can easily be justified on the basis that the potential savings will outweigh the costs.

Interested?

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