For many people, their mortgage is their biggest financial commitment and can often be the largest drain on their finances and lifestyle, but could you save money by remortgaging?
There are a number of good reasons why shopping around and changing your home loan could help you with your finances in the long run.
We reveal five reasons remortgaging could save you money.
To get a better rate
Mortgage rates change all the time and currently fixed-rate deals have fallen considerably. This is because of the Bank of England base rate, by which most mortgages are priced, is currently at historic lows.
You could save hundreds or even thousands of pounds on your monthly repayments and overall loan costs by shopping around for a different rate. Check your current deal as there may be early repayment charges for leaving early, but even then the savings could still be worth it.
Your house value has increased
House prices increased by around 4.4 per cent in 2015, according to the Nationwide House Price Index.
This can make it hard to buy a bigger house but you could use the rising value, or equity, in your home to fund home improvements to expand or renovate your current living space. Homeowners can release the cash in their property through remortgaging. A lender will let you take out a new, slightly larger loan, and you release the extra funds for your own use.
Another option is a further advance, which is a second home loan from your current lender that is just for the amount you want to release.
Your current deal is going to end
When a mortgage deal ends, borrowers are moved onto a standard variable rate. This is usually a lot higher than a fixed rate deal which could hike up your monthly mortgage repayments. Instead, a few months before you current deal ends you should start shopping around for a new rate.
Your lender should inform you when your deal is coming to an end, but remember it can sometimes take three to six months to get a mortgage approved so it is best to be prepared.
You want a more flexible mortgage
Do you want a mortgage where you can offset your savings against your home loan? Or the ability to overpay or even take a break, known as a payment holiday? What about starting by only making repayments for a few years before interest gets added later?
Mortgages come in all shapes and sizes and lenders offer different types of deals, especially for those with varying income requirements. These types of deals can be more expensive though.
To consolidate your debts
As well as funding home improvements, you could also use a remortgage to consolidate your debts. This may reduce your monthly repayments, but remember the total amount owed will increase and you may be paying it back for longer.
Ultimately remortgaging is always worth considering as it can cut your monthly repayments, saving you money and releasing cash to be spent elsewhere.