Your No-Pain Guide
Has your mortgage lost its competitive edge? If so, remortgaging for a better rate with a new lender is an excellent way to save money on your mortgage repayments. You might be currently paying unnecessary interest charges, which over the term of your mortgage can add up to tens of thousands of pounds. Keep that extra money in your pocket by following these simple tips for a pain-free remortgage.
Shop around
When looking for a new mortgage utilise every possible avenue open to you in order to find the best option. That means using independent financial comparison websites and speaking to independent mortgage advisors for advice that is tailored to your personal circumstances. Often brokers have access to deals that you can’t apply for directly, so you might end up a lot better off by taking advantage of their services - even an extra 0.25% interest rate discount can make a huge difference to the overall cost of your mortgage.
What to look for
Pay attention to the introductory offers. Take advantage of discounts, cashback offers and reduced interest rates to really benefit. These will give you excellent opportunities to save some serious cash, and when the deal expires, you can switch again to avoid the boring (and expensive) standard variable interest rate.
Consider consolidating
If you are looking to remortgage in order to save money on your repayments, you should consider consolidating your unsecured debts while you’re at it. The interest rate you pay on your mortgage is much cheaper than the interest rate you pay on unsecured borrowing, such as credit cards and personal loans. Rolling these debts into your mortgage will effectively slash the interest rate of your current debts, and will also simplify your finances, as you will only be dealing with one monthly repayment instead of multiple.
Time it right
Time your switch correctly so that you don’t pay unnecessary fees in the process. Avoid remortgaging during your introductory period, as you will usually have to pay an early repayment charge for leaving your lender during this time. This can be very expensive and is best avoided, particularly as you are probably getting a good deal from your lender during this period anyway.
Do your sums
Work out exactly how much switching will cost you. Take into consideration the exit fee from your current mortgage; and add up the cost of application fees, survey fees and legal fees on the new mortgage. Add this amount to the total cost of the new mortgage during the introductory period, and divide by the number of months in the period. Is this monthly total less than you are paying now? If so, you will be better off with the new deal. Get switching!
Keep it up long term
Switching lenders each time you come to the end of your introductory period is a great long term money saving technique. It ensures that you are always borrowing money at the most competitive interest rate available. As a result, you will repay less money overall, and can be free of your mortgage years earlier than if you were to stick with your current mortgage.
Please note: this website, and the articles and information within it are based on journalistic research. It does not and should not be construed to constitute financial advice. Any information should be considered in regard to specific circumstances. All tips are followed at your own risk and should be followed up with your own research. For more please refer to our terms and conditions of use.