Remortgages

Remortgaging is when you replace your existing mortgage with a new deal.

There are two reasons to remortgage your house:

• Remortgage without increasing the size of your loan but moving to a more competitive deal to reduce your monthly outgoings.

• To release equity tied up in your house, giving you a cash lump sum, for instance if you wish to extend your house or buy a second property. You could also use this money to pay off existing debts at a much more competitive interest rate. This will increase the size of your loan, and possibly your loan period.

Historically, customers have been very loyal to their mortgage lender, staying with them for the life of their loan. However nowadays there is more and more publicity about changing mortgages to get a better deal, so they have become much more competitive.

Some steps to keep in mind:

• Find out whether any upfront costs will be charged.
• Compare your current deal with several others you are interested in to find out which is best for you.
• Ask your lender to send you a redemption statement.
• Calculate whether you would gain by moving your mortgage.
• Research the mortgage market. Work out which deal is best for you.

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