Careful remortgagers 'can avoid being hit with costs'
Oct 03, 2006
Canny borrowers should think carefully when arranging a remortgage in order to avoid being hit with remortgage costs, it has been claimed.
A leading institution estimated that the up front cost of remortgaging to a new deal sets borrowers back around £1,100 on average, which includes booking fees, valuation fees and legal fees.
Around two-thirds of people who remortgage (66 per cent) do so in order to get a better mortgage rate and reduce monthly payments, research from the company reveals, with 19 per cent remortgaging in order to release equity. Almost half of all homeowners (48 per cent) have switched lenders at some stage, with 65 per cent of those who haven't yet switched saying they would consider doing so.
Borrowers can avoid the cost of switching lenders by choosing mortgage deals that don't charge booking fees or come with free legal and valuation fees, or can choose a lifetime tracker rate, the company advised. Remortgaging could save a borrower substantial amounts of money in monthly mortgage payments, but people should consider all the fees and charges involved, not just the headline mortgage rate .People ought to look at mortgage deals with no up-front fees to reduce costs, or consider moving to mortgages with a lifetime rate so that they can avoid remortgaging again.
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