How does remortgaging work?

You may well have heard of mortgaging but never fully understood what it means. In layman's terms, mortgaging is when you look to move from one mortgage deal to another, either sticking with the same lender or moving to a new one. A mortgage is likely to be your largest financial commitment lasting you many years, but you don’t necessarily have to stay on the same mortgage as the one you initially took out, as your personal circumstances may, and probably will, change over the years, giving you a reason to remortgage. Just as you did when you took out your first mortgage, it’s important to revaluate your finances every now and then, and consider all your options in order to know you’ve got a mortgage that is right for you at that moment in time. Just as you might shop around for the best broadband deals and the cheapest energy rates, the same applies to your mortgage. You can shop around to see if there is an opportunity to save money.

If you do find a cheaper mortgage rate, you could end up switching onto the new mortgage deal, and this is what’s known as remortgaging. Check if your new lender is offering a fee-free mortgage (many lenders will write to you near the end of your current mortgage term and offer you a new deal to switch to), or if there is a product fee involved as this could counteract the savings you could have made by remortgaging. There may be an early repayment charge on your current mortgage that you have to pay off before you can switch to a new deal. Again, this could outweigh the benefits of switching. The lower your loan-to-value (LTV), the more mortgage deals that may be available to you. You can work out your LTV by dividing your outstanding mortgage balance by your property’s current value. For example. Consider speaking to a mortgage adviser. Our mortgage advisers understand the criteria that lenders are looking for and can compare mortgage deals to help find the right one for you. We have access to over 90 lenders and can search 12,000 mortgages, saving you time and taking the hassle out of doing it yourself.