Re-mortgaging involves you switching your current mortgage to a new deal either with a new or your existing lender. There are many reasons that you may consider to take this step – the main one is simple; it may save you money.

Reasons to consider re-mortgaging

  • A change in income – you may have received a pay rise, or maybe inherited some money and would like to make extra payments or pay a lump sum towards your mortgage but your current deal does not allow this.
  • A change in circumstance – you may need the flexibility to miss a few mortgage payments due to changing jobs, going travelling or back into education.
  • Release equity for another purpose – you may want to embark on a new business venture and release some funds to start up.
  • Home improvements – you may need to release some money and add an extension or conservatory to your property.
  • Consolidate debts – you may need to release some of the equity you hold in your home and consolidate other debts, such as a car loan or credit cards. Think carefully before securing other debts against your home.
  • Alter your mortgage – you may want to reduce your mortgage term from 25 years to 20 years or increase it from 20 to 25 years.

Reasons to NOT re-mortgage

  • Already competitive – your existing mortgage deal is already very competitive and there is no cost benefit in switching to a different lender.
  • Penalties – your existing mortgage may have large penalties for leaving that it would make it foolish to move before the end of the mortgage term.
  • Outstanding amount – your existing mortgage amount may have fallen below a certain amount and it may not be worth switching lender simply because the amount you will save is very unlikely to outweigh the cost. Some lenders may not even take on a mortgage or that size.