What is a remortgage?

The primary reason for reassessing your mortgage situation is because there’s the opportunity to save a substantial amount of money. Even a small change in interest rate can save thousands of pounds over a few years.

As a first step, why not use our remortgaging calculator to see just how much you could save!

Part of the terms of your current mortgage will include an early repayment charge, especially during any early incentive period. This isn’t an insignificant fee and will be applied if you pay back the mortgage in full before the end of the term – which, of course, you are planning to do as part of your remortgage.

This early repayment fee should be taken into account when calculating the real benefit of switching mortgage providers and if it is larger than the savings that will be made by making the change, it’s probably best to avoid doing so until the time is right.

Even though you would think that taking out a replacement mortgage would mean you wouldn’t suffer from any in-depth credit checks (after all, you’ve shown that you can make the payment on your current mortgage for years and this one is cheaper!), you’d be wrong.

Any new lender is going to go through the same level of delving into your credit history and looking at your affordability as your first provider did when you applied for your initial mortgage – and while you worked hard for months and even years to make sure you were a good prospect that first time, have you thought about doing the same here?

Often once the initial mortgage is successfully done and the house bought, the strict level of fiscal responsibility that first-time buyers have gone through to make it through that first step gets relaxed and a second run of affordability checks and credit scoring would mean they fail an application. If this is you then you may want to hold off on a remortgage, or at least, plan for a future one after a similar period of careful money management.

One situation that doesn’t require the deep level of credit and affordability checking that you might want to ignore is when you apply for a remortgage with the same lender as your original mortgage – they may be willing to simply move you onto one of their other plans without any hassle, so it’s always worth looking at.