What is Remortgaging?

The aim of a remortgage is to change the terms of your existing mortgage and usually, but not necessarily, involves switching to a new lender without moving home. A home owner with existing financial difficulties might consider a remortgage to:

Reduce their monthly mortgage payments – by taking advantage of lower interest rates or by extending the period of their mortgage.
Consolidate their secured and unsecured debt into one loan at lower interest rates.
To repay debts such as personal loans or credit cards.

As with consolidation loans, it is vital that you consider the relative rates of interest for the whole period of the loan, not just the first few years. Other questions you should ask yourself or any potential lender regarding both the existing and prospective loans include:

What are the monthly payments of a remortgage and can I afford them?
What is the total cost and duration of the remortgage?
Are there any penalties for early redemption of the loan?
Are there any restrictions preventing a subsequent remortgage?

In addition, remember there may be substantial upfront costs involved in personal remortgaging, including valuation fees, arrangement fees, legal fees and so on. Particular care should be taken if you are increasing the level of your secured debt as failure to make the increased payments on your remortgage may cost you your home.

Who is personal remortgaging for?

Personal remortgaging can be of use to individuals in financial difficulties if they genuinely reduce the costs of borrowing, without significantly the risks of losing your home. However, as indicated above they do require careful consideration, particularly of the small print.
People with large amounts of equity in their property.