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Remortgaging

Your mortgage is like any other financial product; you want to make sure that the rate you are paying is competitive and that you are getting good value for your money. There is no harm in checking the market regularly to make sure that you are on a competitive rate, and if it turns out you’re not, then remortgaging might be something you could consider.


Most people who are on capped-rate, discounted-rate and fixed-rate mortgages will find that once their deal comes to an end, they will simply be transferred onto the lenders standard variable rate (SVR). This will mean that their payments will rise, and depending who they are with, they may be paying well over and above the Bank of England base rate.


You should consider your mortgage deal ending in the same way you would your car insurance renewal, so when your deal comes to an end, you shop around for a better one with a different provider. In doing this you could save yourself hundreds of pounds per month.


However, while switching mortgage lender can save you money on a monthly basis, there are plenty of things to consider before you do so, not least the fact that you are likely to be charged exit fees on your current deal when you leave.


What will it cost me to switch lender?


Early repayment charge


When you take out your mortgage with a lender it is in their interest to make sure that you stay with them to make your repayments, while picking up the interest along the way. This means that you are very likely to have a clause in your contract that states you will be charged for exiting the deal early. When you exit the deal you will pay off the remaining balance of your mortgage as well as the charge that your provider places on top of this.


Before you go about exiting your current deal it is vitally important that you find out how much you are going to be charged for switching. If the savings on your potential new deal are meagre, and your repayment charge high, it may not make financial sense to make the switch.


Arrangement fee


If you do decide that changing your provider is the right choice, then your new provider will also likely charge you an arrangement fee for your new repayment plan. This will be to cover the costs involved in administering your mortgage, and the price will be at the discretion of your lender.


Valuation fee


This fee is charged by your new lender to calculate a mortgage valuation in order to determine whether or not your home is suitable for a mortgage.


CHAPS fee


This is a fee charged by your potential new lender to cover the costs of sending your money to your solicitor.


Legal fees


Of course, you will also need to appoint a solicitor to complete the transaction.


Need Mortgage help and advice?


Our team of mortgage advisors can help you with any mortgage queries you have, from finding you a lender, to giving you advice on your current deal. We deal with the whole of market, meaning we are able to find the best deal for you, and not just a compromise from a limited number of lenders.

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