What is a Remortgage

A Remortgage is when you change your mortgage without changing your home. A mortgage is simply a secured loan on property or land. By the nature of the mortgage market place the types of mortgage available are numerous.

Lenders have had to adapt to the needs of customers to ensure that there is a mortgage to suit everybody. If you have a mortgage on a property there is nothing to stop you looking for a better deal. You could find another mortgage that has a lower interest rate, this would inevitably save you money as it would reduce your monthly outgoings.

Although it’s much cheaper to remortgage than to agree a fresh mortgage, you may have to pay the following remortgage costs:

Valuation charge
Legal fees
Arrangement fee (to lender)
Broker fee
Early repayment charge

Even after these costs it is often cheaper to remortgage but you should calculate them before committing to remortgage.

If you have had your current mortgage for a while then the odds are that your property has risen in value. This rise in the value of your property means that you could remortgage in order to release some of the equity you now have in the property.

For example if you had a mortgage on a property worth £100,000 five years ago then it could be worth £150,000 now if the market has moved in your favor. If you have added an extension or say converted the loft then you would have added value to your home. You could then remortgage your home for more than the £100,000.The process of paying off one mortgage with the proceeds from a new mortgage using the same property as security

It is always important to remember that each individual's and circumstances are different, so your decision should be based on the above factors as well as the benefits of each financial product.