Remortgages

Friday, 20 January 2006 12:00

A remortgage is the process of replacing an existing home loan with a new one.

When you remortgage you can either switch to a new mortgage provider, or stick with your current lender and change the terms of your deal.

There are several reasons to remortgage your home loan, but also some potential downsides.

The most obvious of the reasons to remortgage is to save money. By remortgaging to a cheap home loan you can save up to £2,500 a year in interest payments on the average loan.

As well as saving money, people moving their home loan can free-up money by increasing the size of their mortgage, or move to a more convenient sort of loan repayment schedule.

However, many mortgage lenders charge fees for people paying off their home loan early. Additionally, many mortgage providers charge arrangement and other fees when taking out a new home loan.

These fees might wipe out the savings you could make by changing home loans, so it is important to take them into account when considering a remortgage.

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