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Remortgaging explained

As competition between mortgage lenders grows, you may be able to take advantage of a better mortgage deal - and save money - by remortgaging.

The best rate to take

Remortgaging to get a better rate can often be a financially wise move, particularly if you plan to increase the size of your loan.

Fixed-rate mortgages can offer peace of mind for future budgeting.

Tracker mortgages may allow you some flexibility in repayments. Some tracker mortgages allow you to make additional repayments after 12 months without early repayment charges. You should remember though that tracker mortgage rates will move with the Base rate and your monthly repayments may go up as well as down.

Please bear in mind that if you are planning on raising extra capital for non-property related purposes you will accrue debit on the property and paying it off over your mortgage term may increase the amount you pay overall.

The winners and losers

The lending market will always fluctuate, in keeping with changing house prices. Interest rates can drop and mortgage deals become more desirable but the rates can also rise and the competitive deals dry up. So should you take advantage now?

If you've a variable rate loan of over 30,000 and no early repayment charges you maybe able to get a better deal on your mortgage. Even if your current home loan does have an early repayment charge, you may still find that the gains outweigh any costs incurred.

On the other hand, if your home loan is below 30,000, it would be a good idea to check up first on fees that you might have to pay when you remortgage. You could find that the savings you make on your new home loan are actually less than the cost of the fees required to move.

Finally, if you've recently moved jobs - or you've become self-employed - you may find that mortgage lenders are a little more hesitant in offering you a remortgage deal. Understandably, they need to know that you can repay what you borrow, and a proven track record of your income will help convince them.