

It’s not essential to stick with the same mortgage throughout the loan period. It could cost you thousands of pounds extra over the repayment period.
This is an explanation of the ins and outs of remortgaging and how you could benefit from it.
What is remortgaging?
Remortgaging is a homeowner changes their current mortgage deal or if they need to take a larger loan to release more money from the equity of their home.
Many mortgages have a fixed or introductory low rate that ends after a few years. If you change the deal after this time period it can help lower the cost of the mortgage. Homeowners may also choose to release the equity in their home for a larger sum than the original mortgage.
Who should consider remortgaging their home?
Homeowners who have completed the introductory period on their existing mortgage deal may want to consider remortgages, especially if they are now on their mortgage lenders standard variable rate.
If you want to make changes and invest in your property to add to the resale value, it is also a good option. Making significant changes such as an extension or loft conversion can add up to 20% on the sale price of a property. So it may be beneficial to remortgage to cover the cost of the work.
4 benefits to remortgaging
1. Lower your mortgage costs
When your introductory rate is over, you’ll begin to pay a higher interest rate on your mortgage. It could add a lot of interest over the term of the loan.
2. Adapt to your lifestyle
Your circumstances may have changed and your current mortgage deal may not suit you or offer you the flexibility you need. For example, if your income has decreased or increased since your original deal, you may want to change your monthly repayments or loan term.
3. Free up your capital
Lower payments, thanks to more favourable interest rates on a new deal, mean you’ll have more disposable capital from your monthly income.
Releasing cash in the form of a larger loan amount also means you can access additional equity from your home to pay for big expenses such as home improvements.
4. Be mortgage free sooner
If you’ve received a windfall or have made significant savings, you could be in a position to make an overpayment or even pay off your mortgage early.
There is a potentially to save thousands of pounds in early repayment charges and exit fees by remortgaging. Paying it off in less time will also save you on the interest charged over time.
Before you remortgage…
Remortgaging can take up to three months to complete once you’ve decided to go for it.
Your credit rating may be affected when you apply for a new mortgage deal just like your initial mortgage application. If your circumstances have changed you may also be rejected for a new deal.
There are also fees and charges associated with switching mortgage deals, which could offset any savings from a better interest rate.
Before you decide to remortgage your home, speak to expert mortgage advisers who can tailor their advice for your personal financial circumstances and needs.