When you re-mortgage, you are switching your mortgage to another deal and frequently, another lender.



You could re-mortgage for various reasons however, most people simply switch lenders because it will work out cheaper for them. For example, your introductory fixed rate may have finished and rather than pay the lender's standard variable rate you could switch to a new preferential rate with another lender. Other situations where you may need to re-mortgage include to pay for home improvements, consolidate debts, school fees or to buy a second home.

It is worth noting that a re-mortgage is not the best option in all cases. Even if the lender you are considering switching to is offering a lower rate, you must take into consideration the following: 

• You may be able to switch deals with your current lender, avoiding any unnecessary costs.  

• There may be an Early Repayment Charge payable to your existing lender, for redeeming your current mortgage. Instead, it may be worth considering a Second Charge loan.   

• The new lender may charge you additional set-up fees including a valuation fee and/or legal fees.

• If you switch mortgage remember to look at the overall repayment period. You may be able to pay less monthly but check the term of the mortgage as well.

 

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBTS SECURED ON IT.

Securing short term debts against your home could increase the term over which they are paid and therefore, increase the overall amount payable.