Remortgages

In a Nutshell...

• Remortgaging is simply taking out a mortgage, except you're not buying a property.
• You'll have to pay for a survey and legal fees, but these shouldn't be so high the second time around.
• You may also have to pay an early redemption charge if you're still covered by a tie-in or overhang on your existing mortgage.

What is it?

The aim of remortgaging is to find a better deal than you have now. Simply put, remortgaging is just choosing a different mortgage, except you're not buying a house. You still choose the type of product, rate you pay and method of repayment. You don't even have to change lender - you can even get a remortgage with your current lender.

People remortgage for a number of reasons, including changing product, reducing the length of the loan and increasing flexibility. Mostly, though, the reasons are saving money and releasing equity from the property.

Costs and charges

• Survey: The lender will want another survey doing. Any number of things could have happened since the first one was done.
• Administrative fees: There will be legal and some arrangement fees, although these should be lower than for a completely new mortgage. Some lenders offer packages which cover these fees for remortgages, providing you use their solicitors and surveyors.
• Early redemption charge: If you are still within an introductory offer or other tie-in or overhang period, you may have to pay an early redemption charge to move your mortgage. Here, the best thing to do is compare the potential savings from moving the mortgage against any fees or penalties.

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