Remortgaging can offer benefits, but there are potential downsides that need careful consideration. One of the most common is cost. Arrangement fees, valuation charges and legal expenses can reduce or even outweigh any interest savings. If you leave your existing deal early, you may also face an early repayment charge, which can sometimes be several thousand pounds.
Affordability rules may also have changed since you first took out your mortgage. Lenders now apply detailed stress testing to ensure you could afford repayments if rates increase. If your income has reduced or your outgoings have risen, options may be more limited.
Extending your mortgage term to lower monthly payments may increase the total interest paid over time. The key is comparing the full cost of staying versus switching before making a decision.
Your home may be repossessed if you do not keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.