Remortgages can be used for various reasons. However, most people simply switch mortgages because it will work out cheaper for them. For example, the introductory discounted interest rate may have finished with your current lender; therefore you could potentially get a new discount rate, or a lower APR, with another lender. Another example is when you may need to re-mortgage to consolidate debts.
It is worth noting that a remortgage is not the best option in all cases. Even if the lender you are considering switching to is offering a lower APR, you must take into consideration the facts that:
Also you may be able to switch your mortgage deal with your current lender, avoiding any unnecessary costs. Many lenders will allow you to switch your mortgage deal reasonably frequently.
A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.
Debt consolidation is not always the most suitable option, consolidating debts must be carefully considered. It will usually mean more interest over a longer repayment term and there may also be early repayment penalties on your current mortgage, you should think carefully before securing other debts against your home. There are other ways to manage debt such as free debt advice charities, you can find out more by contacting the Money Advice Service.