Remortgaging

What is a remortgage?

A remortgage is when you take out a different mortgage on your home. For example, you may decide to remortgage when you have come to the end of a special deal - e.g. a two-year fixed rate - and you decide to take out a new two-year fixed rate with another lender, or you may need to borrow more money against the cost of your home.

When is it a good idea to remortgage?

It's a good idea to remortgage if you've come to the end of a cheap deal period, or if you can get a better deal elsewhere. If my lender's interest rate is more expensive than the lender next door's interest rate, it's a good idea to remortgage, however you need to watch out for any early repayment fees and charges that you may have to pay.

What are the pros and cons of remortgaging?

The positives of remortgaging are that you can get yourself a better deal and you can end up paying less money back on the loan that you've got. The disadvantages of remortgaging are that you may find out that you have an early repayment charge or you have to pay an arrangement fee, or a mortgage exit fee, which can all add to the cost of moving your mortgage. You should always add in these costs to the cost of the new loan before you work out if it's cheaper.

What are the pros and cons of remortgaging later in life?

The advantages of remortgaging later in life are that you can cut your mortgage payments at a time when you might need the money more, to save for your retirement or to enjoy your retirement. The disadvantages of remortgaging later in life are that some lenders do not like lending money to people once they've retired. As a result you may find you can only get a mortgage over a shorter period, or you may find it harder to get a good deal on your home loan.