Remortgaging - arranging a new loan without moving home - is rapidly becoming more popular and in one recent 12-month period it accounted for half of all loans by members of the Council of Mortgage Lenders.
How to identify if you are overpaying
If you are currently paying your lender's Standard Variable Rate (SVR) on your mortgage you are probably losing hundreds of pounds each month by sticking with this expensive rate. Around a third of all borrowers pay their lender's SVR but, with about 9,000 possible mortgage deals on the market, there should be a better, cheaper and easier option.
How much you could save
An average borrower, remortgaging every two years, could save at least £50,000. You might save slightly less if you have to pay costs for switching, but many lenders now waive these. If you want to cut out those remortgaging costs, like arrangement, legal and survey fees, consider lenders such as Cheltenham & Gloucester, Abbey, the Coventry, Nationwide and Yorkshire building societies, Halifax, and Alliance & Leicester, which offer free valuation and legal fees on certain deals. ...continues below
Don't assume remortgaging means hassle
It usually takes no more than an hour to fill in remortgaging forms and some transfers can take just a couple of weeks, although others will take up to six or even eight weeks.
Do your research
Visit websites like www.charcolonline.co.uk, www.moneysupermarket.com, www.moneyfacts.co.uk and www.moneyextra.co.uk to see what deals are on offer at the moment. Also look at the 'best buy' tables in Sunday broadsheet newspapers.
Once you've done your research, talk to some mortgage brokers who don't charge a fee. You are under no obligation to buy a mortgage from them but there's nothing to stop you getting some free ideas from them.
Try your existing lender
If you find a better deal elsewhere, ask your current lender if they will match, or even beat it - they'll want to hold on to your custom. It can also be the best move as it will cut out the possible exit fees from them and the arrangement fees from the new lender.
Take out a new loan
If your own lender won't play ball, go for the deal you want. There's nothing to stop you taking out a mortgage yourself if you've done the research. Or you could go through an independent mortgage broker.
However, beware of the really cheap deals, as some lenders won't offer to pay your transfer fees. You'll have to do your own sums because it depends on the size of your mortgage as to which would be the best option. If you have a relatively low mortgage then it's best to go for a deal that doesn't charge arrangement fees and so on.
Some arrangement fees now can be around £400 to £500 and if you add in the survey and legal fees, you can be looking at saving around £1,000. If you have a big mortgage, you would probably be better off just going for the cheapest rate.