Remortgaging

A mortgage is probably the biggest financial commitment we'll ever make, but once the deal's signed it's tempting to forget about it for good. Yet lenders are constantly creating new mortgage products and there are some fantastic offers to be had.

Whether you're remortgaging to get a better long-term deal or to free up some cash, our ten-minute tutor will show you how to check your mortgage is a good deal and how to change it if it isn't.

Before you begin: Dig out the documents
You're going to need your latest mortgage statement front of you before you start. The terms and conditions document will also be handy.

Make a note of your lender's phone number, too. Sometimes it's easier to call them than to dig through the small print. You'll need your account number handy when you speak to them.

Step 1: Check out your current deal
From the documents in front of you, write down the following numbers:
- The interest rate
- The balance on your mortgage
- The time left on your mortgage
- The expiry date of any fixed or discount rates

If you're paying the standard variable rate on your mortgage (which is likely if you've had it a while), there's a good chance you could save some money by remortgaging.

Step 2: Do you want the same type of mortgage?
You don't have to replace your mortgage with the same type. If your circumstances have changed, perhaps you want to be able to pay off lump sums, or predictable monthly payments have become more important, take the opportunity to look again at your options.

Step 3: Check the hidden cost of switching
Many mortgages come with early repayment charges, to put you off moving. This will often be a certain number of months' interest, or a percentage of your mortgage balance. For example, a 1.5% charge on a mortgage with £100,000 left to pay would be £1500.

Your existing lender can send you a redemption statement (some will charge for this). This tells you how much it would cost to pay off your mortgage on a particular date, including charges. This is the amount you'll want to borrow on the new deal.

Your new mortgage will also come with some fees. When you work out your costs, include:
- Arrangement fees
- Valuation fees
- Any higher lending charges

Some lenders will waive arrangement fees for people who are remortgaging, and might also offer to pay your legal costs. These normally come to around £250 otherwise.

Step 4: Choose your moment carefully
Early repayment charges are usually highest in the first few years of a mortgage: check to see if waiting a couple of months could mean you pay less, or avoid them altogether.

Step 5: Look for a better deal
Use online mortgage tools to see if you can get a better deal. Don't just look for lower monthly payments; the interest rate is the key figure for long-term savings.

Make a shortlist of two or three deals that look good and get the lenders to send you more information. You haven't committed to anything at this point.

Step 6: Talk to your current lender
If you've got a pretty good mortgage deal already, then congratulations! Even if it isn't quite the cheapest, you might decide that avoiding early repayment charges and a bit of paperwork means it's not worth switching just now.

If you've tracked down a better deal, it's always worth talking to your current lender to see if they'll match it. They might even offer to move you to a cheaper product of their own and waive the fees if it means keeping your business.

Step 7: Take the plunge
Chosen a new mortgage? Fill out an application form from your preferred lender and wait for them to send you a formal offer. If you're happy with the offer, sign and return it, and hey presto! You've taken the first steps towards saving money.