A remortgage is where you take out a new mortgage on a property you already own – either to replace your existing mortgage, or to borrow money against your property. Around a third of all home loans made in the UK are actually remortgages.
Most people remortgage their property to get access to extra money. But this is likely to increase your monthly payments. You might be able to increase how long your mortgage lasts to balance this out.
Looking at new mortgage deals can also save you money on your monthly repayments if you can find one with a lower interest rate. Another option is to shorten your mortgage term, so that your home is paid off quicker and you pay less interest in the process.
The Loan to Value (LTV) is the amount of your money you’re borrowing compared to the overall value of the house. So, if you have paid off £20,000 towards your £200,000 property, you own 10% of the property. The LTV is the remaining 90%.
The lower your LTV, the better mortgage deals you’ll find. The cheapest rates are often available for people with a 60% LTV.
You can have a repayment mortgage or an interest only mortgage.
Leaving your current mortgage may mean a cancellation penalty.