Remortgage Advice: Remortgaging

Remortgage Advice: To remortgage simply means to change your existing mortgage for a new one, a remortgage can be with your existing mortgage lender or a different one. Before you start the remortgage process, make sure you are aware of any remortgage penalties that will apply by stopping one mortgage and starting another. There may also be penalties associated with your new mortgage.

Reasons to remortgage:

To move onto a more competitive rate of interest - for example, if you are currently subject to your mortgage lender's Standard Variable Rate, you could enjoy lower monthly payments if you remortgage onto one of their lower fixed or discounted or other rates. If you remortgage through your existing mortgage lender it is likely to be easier and with less additional costs involved. To remortgage is a simple administrative process that can be undertaken quickly and will save you money.
To move from interest only to capital and interest repayment (or vice versa) - if you currently have an interest only mortgage that is linked to an investment or savings product you may find that your investment is projected to have a shortfall on maturity. If you remortgage onto a capital and interest repayment mortgage you could ensure that your mortgage is repaid in full on its redemption date. There may be an administrative charge to do this remortgage but most lenders will be happy to switch your payment basis.
To borrow additional money - if you want to borrow additional money, this can be done via a remortgage with your existing mortgage lender or with a different one. If you are staying at the same property you will probably be asked the reason for the further advance of money. If your remortgage is for home improvements there should be no problems to remortgage.
To release some of the equity - over the years property values have increased dramatically and many people now have substantial amounts of equity in their properties. If you would like to release some of that equity you could re-mortgage for a higher amount than you have already, subject to the mortgage lender's agreement. Many people are releasing equity in order for them to buy second homes or consolidate debts. This should be acceptable to your remortgage lender as long as they have full details.

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