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Our guide to remortgaging can help you decide if switching from your current mortgage deal is right for you Paying off your existing mortgage with a new one can offer flexibility, a better deal on your monthly repayments or an opportunity to consolidate your debts.
Remortgaging can also save you thousands of pounds, but it comes down to your personal circumstances.
It’s worth bearing in mind that the new mortgage provider you switch to will need to value your property, so be prepared to research the local house prices and make a note of any home improvements you’ve made, just in case they come back to you with a lower than expected estimate.
While mortgages will offer far lower interest rates than credit cards and an improvement on personal loan rates, that doesn’t mean that remortgaging for debt consolidation will save you money.
Continue reading our guide for the facts or call direct the UK’s leading lenders direct.
Whatever happens, it’s good to shop around the market even if you’re not looking to remortgage your property immediately.
Moreover, you may also put your home in jeopardy, as it will be secured against the debts on your credit cards and loans, as well as your mortgage.
In essence, avoid remortgaging for debt consolidation and see if you can pay off your existing debts separately instead.
For example, if you have debts of £5,000 and remortgage with 4% interest over 20 years, you will pay just over £4,000 extra in interest.
Tracker mortgage: Unlike a fixed rate mortgage, a tracker mortgage will set your remortgage deal interest rate a percentage above the Bank of England's base rate or above the lender's standard variable rate.
This means that if the Bank of England's base rate goes up or down, then this will affect the rate you pay.
If you’ve already paid off the bulk of your mortgage then it may not be worth paying for a remortgaging deal as the savings you make will struggle to cover the cost of the switching fees.
To help yourself save money, compare the annual percentage rate (APR) between your current mortgage and other remortgage deals on the market, then assess whether or not this will better the costs.