When to consider remortgaging
By: Nick Cox | Posted: 21st January 2008
Remortgaging basically means swapping your mortgage from one lender to another to get a better deal. The UK's mortgage market is a highly competitive place, hence there's no shortage of great deals on offer. Last year millions of borrowers wisely took advantage of these deals, with remortgages
accounting for two in five of all the home loans taken out.
Remortgaging is a great way of saving money. In fact, it's probably one of the most effective money-saving activities there is. For example, switching mortgage to a deal where the interest rate is just 1% lower than your current rate can potentially save you thousands of pounds.
• If, like most borrowers, you are on your lenders standard variable rate (SVR), then you are more than likely paying too much. Paying over the odds helps lenders fund the enticing offers that they use to attract their new customers. So, you pay more so new customer pay less. If this is the case then it's time to move. But, before doing so, challenge your lender to see if they can provide you a better offer. No borrower wants to lose a lender, as they are making money from your debt.
• Maybe your mortgage doesn't suit your needs any more. Perhaps your financial circumstances have changed and you want to make extra payments, but your mortgage deal won’t allow it. Or perhaps you're changing job, going travelling, going back to education etc. and your mortgage won't allow you to take a payment holiday. Whatever your needs, there is a mortgage deal out there that is flexible enough to meet them.
Your home is bound to have risen in value since you bought it. If you remortgage then you provide a way of borrowing larger sums at a lower mortgage rate interest.
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Tags: job, accounting, sums, odds, lenders, financial circumstances, borrowers, interest rate, saving money, mortgage deal, remortgaging, mortgage rate, mortgage market, great deals, home loans, current rate, standard variable rate, lower mortgage, rate interest