Remortgaging means moving your mortgage to a new lender while staying in the same property. But there are a lot of things you need to be aware of to make sure you’re getting the best deal.

Why should I remortgage?

When you first took out your mortgage, you might have signed up for a really good deal. But over time, the mortgage market changes, and new deals become available. This means there might be a better deal available for you now, which could save you hundreds of pounds.

You won’t necessarily have to change lender.

Remember to check if there are any arrangements or product fees on any new mortgages you’re looking at, and if you’re ending your mortgage deal early, any early repayment charges from your existing lender.

These fees can add to the cost of remortgaging and might make remortgaging more expensive than staying on your current deal.

When should I remortgage?

You can remortgage at any time. But if you’re not at the end of your fixed-rate term, you might have to pay an early repayment charge.

Most people remortgage when they get to the end of their fixed-rate term as this is when your mortgage might stop being a good deal.

Why it pays to switch and when it doesn’t

So, how can you work out if remortgaging really is getting you a better deal?

In the examples below you can see the different amounts, you would pay in total, over the fixed period, per month, and in interest, depending on if you stuck with your original deal or moved to one of the two remortgaging options.

Both option 1 and option 2 save you money compared with sticking to your original deal. However, the arrangement fee on option 2 makes it more expensive than option 1.

Check the costs

Before you switch, be sure to check out the costs.

Some lenders might offer fee-free deals to tempt you, but if they don’t, you’ll have legal, valuation, and administration costs to pay.

You can use the Annual Percentage Rate of Charge (APRC) to help you compare deals.

The APRC is a way of calculating interest rates incorporating some mortgage-related fees in the calculation, giving you a way to compare mortgage deals.

What might look like a money-saving deal could end up losing you money if you don’t do your sums first.

Get advice

Taking advice from a qualified expert offers you extra protection because if the mortgage turns out to be unsuitable, you can complain to the Financial Ombudsman Service (FOS).

If you choose to go down the ‘execution-only' route (where you make decisions on your own without advice), there will be fewer circumstances where you can complain to FOS.