Re mortgages - Worth The Switch?

Remortgaging is becoming increasingly popular as homeowners switch to different mortgages or lenders to secure better deals. This process involves changing your mortgage to one that may offer better terms or suit your current circumstances more effectively.

Considerations for Remortgaging

Charges: Check if there are early repayment penalty charges on your current mortgage. Sometimes, the long-term savings from switching mortgages can outweigh the cost of these penalties.

Fees: Remortgaging involves various costs, including valuation fees, solicitor fees, and arrangement fees. Some mortgage deals offer incentives to cover these costs, or even ‘fee-free’ options. It’s important to weigh these costs against the potential savings on interest to determine if switching is worthwhile.

Features: Consider new mortgage types that offer additional benefits. Flexible mortgages allow more control over payments, while current account mortgages consolidate debts and savings to achieve better interest rates. Offset mortgages provide similar benefits but keep accounts separate, offering flexibility without a large overdraft.

Equity Release: If your home's value has increased since your original mortgage, remortgaging can allow you to release some of this equity as cash. This option is subject to limits based on your income and property value. Additionally, there are equity release schemes for retirees, where companies buy your home but allow you to live in it rent-free for the rest of your life. Ensure any scheme you consider is a member of Safe Home Income Plans (SHIP) for protection.

Remortgaging can be a strategic financial move, but it’s essential to consider all associated costs and benefits before making a decision.