When should I remortgage?
Remortgaging can make sense when a lower rate saves enough each month to cover arrangement fees, valuation fees, legal fees, and any early repayment charge. The key number is the break-even month: how long it takes for monthly savings to repay the switching costs.
What fees are involved in remortgaging?
Common UK remortgage costs include arrangement fees, valuation fees, legal fees, broker fees, and early repayment charges. Some lenders offer cashback or free legal work, which can reduce the total switching cost.
Early repayment charges explained
An early repayment charge is a fee for leaving a fixed-rate deal early. It is often a percentage of the outstanding balance and can be large enough to wipe out the benefit of a cheaper new rate.
Fixed vs variable rate mortgages
Fixed rates give payment certainty for a set period, while variable and tracker rates can move up or down. A lower variable rate may look attractive, but the risk of future rate rises should be weighed against the savings shown here.