Could you remortgage and save money?

Could you remortgage and save money?

A third of homeowners plan to cut back their monthly mortgage payments by switching to a new deal this year, says TSB. The savings can be big – but there are things you need to watch out for.

The incredibly low interest rates on mortgages seen recently means it could be possible to reduce your monthly payments. The TSB research suggests someone with a £100,000 mortgage would save £96 a month on average by switching, adding up to £1,152 over a year.

See also: Why remortgaging now could save you a small fortune

See also: Mortgage nightmare hits millions of pensioners

We recommend talking to a financial advisor before remortgaging, but to figure out if you should consider it, we've six key questions to ask yourself.

How long is left on your mortgage?

If you're on a fixed mortgage, you'll know how long you have left before you need to get a new deal. Fail to remortgage when the deal ends and you'll be moved to a standard variable rate tariff, which is usually far more expensive.

Are there any fees on your existing mortgage?

You don't have to wait until your current fix ends to get a new deal – but read the terms and conditions to see if there are any penalties. You might be charged for leaving the deal early.

Are there fees for the new mortgage?

Likewise, though the new deals might have far lower interest rates, any fees might make the overall cost far more expensive. You could get charged legal, valuation and administration costs.

Has your home increased in value?

As well as cutting the interest rate on your mortgage, you might be able to get a better loan to value (LTV).

Mortgage deals are calculated as a percentage of the total value of the house. The lower the LTV, the lower the rates of interest.

When you first bought, you might have only had a deposit of 10% - meaning your LTV was 10%. But if your home is now worth more, the amount you've already paid through the deposit and monthly repayments could mean you can get a better deal.

How much is left on your mortgage?

If you don't have a huge amount left to pay, you might find the savings you'll make in interest aren't huge. It's even possible the fees involved could actually cost you more money.

What will you do with the money saved?

If you manage to reduce how much you pay each month, could you put that money back into the mortgage and overpay it? If this is something you want to do, find out if the mortgage you move to will allow it.

This article is provided by the Money Advice Service.

Most viewed property of the year
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Most viewed property of the year
This unassuming three-bedroom detached house in Martins Heron in Berkshire doesn’t immediately look like the kind of property to draw the crowds. However, the fact it was used as Harry Potter’s home in the first of the films means we were intrigued to see inside this £475,000 property that was ideal for commuting.
This was an impressive seven-bedroom home in Upper Denby, on the market for £1.3 million - with plenty of rustic charm and a wood-burning stove. However, we all know the real reason this made it to the list of the most-viewed properties: it’s the enormous play area complete with pirate ship that you can just catch sight of through the lounge window.
This five bedroom relatively newly-built mansion has every whistle and bell you could wish for - from a cinema and games room to a gym, swimming pool, and a dining room that’s big enough for a grand piano in the corner. It’s still on the market for £1.05 million, and is right next to Lincoln Golf course if you fancy playing a round.
Unsurprisingly, this development project on Chadwick Road in East London has been snapped up. At just £1 million you got 13 rooms over four floors - with off-street parking for three cars. No wonder it was the seventh most popular home for us to look at, and dream that with a bit of elbow grease we could have a huge London property... and we could finally park somewhere near it too.

This is a home that comes with a dream lifestyle. For just £1.4 million, you can get an incredibly swanky five-bedroom farmhouse in seven acres of lovely Welsh countryside. You also get a two-bedroom barn conversion - either to house visiting family, or to run as a holiday letting business. The house is still in the market - so that dream could still be yours.

Ever fancy your own posh lakeside hideaway with its own jetty just over an hour from London - for just £2.8 million?

Quite a few people did, judging by the fact that this new development in Cirencester was the 5th most viewed house of the year.

For just £545,000, this 6-bedroom house in Donaghadee could be yours. The property itself is very recently developed in an elegantly rustic New England style. There's plenty of room, and a dream bathroom. But possibly the reason it features so high up the list of most-viewed houses is that it comes with a paddock and stable - perfect for anyone with horsey aspirations.
It’s easy to see why this pretty £375,000 cottage is in such high demand. First is the fact it has been rebuilt from reclaimed stone, so combines old world charm with handy modern features (like a good-sized kitchen and fancy bathroom). Then there’s the location - right in the centre of the village of Holmfirth - best-known as the setting of Last of the Summer Wine.

This impressive house in Bromley in Kent has footballer written all over it. From the pale grey colour scheme, to the acres of space, and the enormous patio for entertaining, there's plenty for a footballer to love. At just £1.7 million it’s pocket-change for them too. For the rest of us, there’s the chance to dream of a mansion within commuting distance of London for the price of a flat in Notting Hill.

There was a time when a semi-detached five-bedroom home in Hampstead Garden Suburb was the sort of thing that ordinary families could aspire to. Now it's the kind of thing we spend our time daydreaming over on property websites: marveling at a 90 foot garden and the fact it has a garage. The price tag of £2.25 million means it's the kind of house we can only ever afford to look at online - which is probably why it's the most viewed property of the year.

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