Remortgage repayment shock

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Remortgage Top Tips

Getting a remortgage can save considerable amounts of money.

However, to make the most of your remortgage, it is worth considering the savings and costs.

Like any financial transaction, a remortgage usually has both pros and cons. Below are a few remortgage tips to bear in mind when you are evaluating your remortgage options.

• There are a great variety of different remortgages on the UK mortgage lending market. These can include fixed-rate remortgages, capped rates, trackers, cashback mortgages and flexible loans, as well as many more. To the uninformed, these mortgage loans can be perplexing, particularly as each has both pros and cons. The lender you choose for your remortgage should explain fully the remortgage advantages and disadvantages of each loan product. If they do not, consider taking independent financial advice.
  
  
• When remortgaging, stay aware of your new lender’s standard variable rate. Whether you are getting a fixed, tracker, capped or other remortgage, when it expires you will have to pay the standard variable rate offered by the lender. Compare your lender’s standard variable rate with those of other lenders to assess how competitive they really are.
  
  
• Stay as flexible as possible with your remortgage. Many mortgage lenders apply hefty early repayment charges (designed to encourage borrowers not to remortgage) to some of their loans. Often, these charges can be really expensive, equating to several months of mortgage payments. Before choosing a remortgage, therefore, check how much your current early repayment charges are and how much those applied to your new loan will be.
  
  
• Make sure you compare arrangement fees for your remortgage. Many mortgage lenders do not charge a fee for remortgaging, however, these costs can be made up in other ways such as charging for the legal fees and valuation. Some loans include extremely high arrangement fees.
  
  
• You can remortgage as often as you want, but bear in mind the cost of early repayment charges and arrangement fees. However, evaluating how competitive your mortgage loan is every year, and working out if remortgaging could save you money, could result in lower interest repayments over the life of a loan.

 

Please see our guide to the remortgage process and our remortgage FAQs for more information.