Remortgage is in many cases the term used when you are looking to clear your mortgage debt by taking out another mortgage with another provider.  The main intention for many to opt for a remortgage deal is to obtain a better rate of interest to the one they currently have.

With the current base rate standing at an all time low mortgage lenders are offering attractive deals to help homeowners make considerable savings.  The remortgaging market has many providers that range from high streets banks to building societies and offer many variations on the remortgage product.

It is important to remember that in majority of cases your mortgage is more than likely to be the biggest financial commitment you make and probably the biggest debt you are likely to take on.  Therefore, any opportunities to help reduce the debt and create a more sustainable financial path are most definitely worth the consideration.

A remortgage as a simple explanation is when you take out a new mortgage with a new provider and pay off your old mortgage.  Your new mortgage lender will pay off your original mortgage loan and your commitment will then be with them.

Once the remortgage process is complete you will then make monthly mortgage payments based on your new terms and conditions.  To take on a remortgage deal you do not even need to move out of the property you live in.  In majority of cases the homeowner will explore the mortgage market to obtain the most financially viable deal.

Homeowners quite often explore the possibilities of remortgaging their home and in majority of instances it is to look to reduce their monthly mortgage payments and make huge savings.  In many cases homeowners are on interest rates that are higher than what is currently being offered in the market and as a result of factors such as the base rate and market competition remortgaging deals are there to be taken advantage of.

Remortgages could also be a solution if you are looking to move to a bigger home and as you may need more money the timing could be an opportune moment to secure a better rate of borrowing, especially if your current mortgage product is not portable. i.e. does not allow it to be moved to your new home.

Opting for a remortgage may not be the choice for everyone and your circumstances may dictate that you are less likely to qualify for one.  So before you go ahead and take on a remortgage it may be worthwhile considering the following points.

• Your current mortgage deal is very competitive and the costs of moving simply outweighs the benefits.
• Your current mortgage is coming to the end of its term and you have such a small mortgage debt.  The costs to take on a new remortgage application coupled with your exit costs may not be financially viable.
• Your current mortgage provider has tied you into a deal that make it difficult for you to leave and the penalties you are likely to incur are not worth your while.

If you have considered the option of remortgage then a sensible place to start the journey would be with your current mortgage provider.  Many lenders are prepared to work with you to find a solution especially if you are good business for them.  In some instances, your lender could offer a more favourable mortgage product that meets your needs and gives you the savings you set out to look for.  It is also important to speak with your lender to determine exactly what the final mortgage settlement figure would be should you decide to move elsewhere along with any associated costs from their part.

Having obtained the best possible deal from your current provider you should then be armed with enough information to look further afield.

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The whole purpose of remortgaging for many is to get a better deal and reduce monthly mortgage payments. For those homeowners who are cost conscious, doing your numbers will pay great dividends.  Find out from your current lender the costs incurred should you decide to leave. Some lenders charge an early redemption penalty, if the figure is in the thousands then compare with the savings you would make in lower interest rates over the term of the loan to see if the option is viable.

Consider the overall  costs you could incur from the new lender to take on a new mortgage product such as booking fees, administration fees, valuation , legal and application fees.  Lenders often give you the option to add any fees to the new mortgage but it is important to realise the true cost of that, you will end up paying interest for the whole duration of the mortgage life, which inevitably costs you much more.