If you were paying an interest rate of, say, 5 per cent on a £150,000 repayment mortgage over 25 years, your monthly repayment would be £877.
If you remortgaged to a lender offering a deal at 3.5 per cent, this would fall to £750.
If you switched to a rate of 3 per cent, if would be only £711.
In just a year, the 3.5 per cent deal would save you £1,524.
If you remortgage over five years, you will have saved over £7,600.
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 mortgage brokers who will have the entire market at their fingertips, to see exactly how much your new monthly payment could 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 On Your New Loan
You will need to take into account the set-up fee (also called an arrangement or reservation fee), the valuation and conveyancing costs for your preferred new deal. Remember that some fees are fixed – these favour big loans while others are based on percentages so smaller loans pay less.
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.
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).