Remortgaging your home is becoming more common. All this means is that you switch to a different mortgage and sometimes a different lender to get a better deal.
If your life has changed since you first got your mortgage, you may want to switch to a new one that works better for you. Also, if you choose a mortgage with a special rate for the first few years, you'll pay more than with other mortgages once the special rate ends. So remortgaging can save money, but there are a few things to think about first:
Charges
Do you have to pay a fee if you pay off your current mortgage early? In some cases, it may still be worth it to change, because the difference in interest paid over time could more than make up for any fees.
Fees
You will need to plan for all the costs that come with getting a new mortgage, such as the fee for a surveyor to do a valuation, the fees for a lawyer, and any fees for setting up your new mortgage. Some deals give you cash to help cover costs or don't charge you any fees. You should compare the total cost to the amount of interest you would save to see if it's worth switching.
Features
Many people are switching to one of the new types of mortgages, like a flexible one that gives them more control over their payments or a current account mortgage that lets you combine all your debts, savings, and checking account to get the best interest rates and save money. Offset mortgages are the same as other mortgages, but the accounts are still kept separate. This means you can move money from one account to another, but your current account won't show a scary large overdraft.
Release of equity
If the value of your home has gone up since you got your mortgage, you can refinance to the higher amount and get the difference in cash. How much you can borrow will depend on how much money you make and how much the house is worth. Another part of "equity release" is the way that older people can use the value of their home to get cash or a steady income. This means that they will buy your house from you, but you will be able to live there rent-free for the rest of your life. This group includes "home reversion," "roll-up," and "home income plans." Make sure that any plan you join is part of Safe Home Income Plans (SHIP).
