Remortgaging Tips

The Motley Fool recently posted a tip for smarter remortgaging, which suggested regularly contacting your lender to see if they have any better deals available, and whether they’d be willing to switch you onto them. A threat of moving to another lender would probably be a good trick to try, as long as you’re not currently tied into a deal.

The article then goes on to suggest that if you move to a rate which gives you as lower monthly payment, if you are allowed to make overpayments on the deal, carry on paying the same amount as you were before. This way you’ll cut the term you’ll have to pay the mortgage for, and ultimately reduce the total amount you have to pay for your house.

Opting for a lower interest rate will free up money to overpay. [Mortgage Broker] London & Country point out that a borrower with a £100,000 mortgage on a rate of 4.75% could save £11,396 over the life of the loan by making overpayments of just £50 a month. The term of the mortgage would also fall from 25 to 21.5 years.

You can use Money Watch’s mortgage overpayment calculator to see how overpayments could affect your mortgage.

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