Saving money with remortgaging in the UK

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How much can I save by remortgaging?

If you were paying an interest rate of, say, 7.5 per cent on a £100,000 repayment mortgage, your monthly repayment would be £739.

If you remortgaged to a lender offering a deal at 6.5 per cent, this would fall to £675.

If you switched to a rate of 5.5 per cent, if would be only £614.

In just a year, the 5.5 per cent deal would save you £1,500.

Over a traditional mortgage term of 25 years, that adds up to a staggering £37,500.

So never assume it won’t be worth remortgaging.

How to compare Mortgage deals

To see how much you could save, shop around for a better interest rate than you are on now.

Check with your mortgage broker or direct with your preferred lenders exactly how much your new monthly payment would be.

And make sure you’re clear on all the terms and conditions before you commit yourself.

To see for yourself how much you could save, use our calculator How much will my mortgage cost me every month?

Ask about the fees

Don’t forget to check if there is an early redemption penalty on your existing loan, as this could more than cancel out any savings you would make by switching.

(For more on this, see Early redemption penalties explained.)

Also, be sure to take the set-up fee (also called an arrangement or reservation fee), valuation and conveyancing costs for your preferred new deals into account.

And be particularly wary of new mortgages that come with an extended redemption penalty. (For more on this, read How to avoid paying an early redemption penalty.)

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