Advice on how to keep down the cost of a remortgage

Friday, 25 Apr, 2008

One in eight people is terrified they will lose their home if the credit crisis causes their mortgage payments to rise, a new survey by Which? Money reveals today.

And with good reason - more than a million homeowners coming off cheap deals face increases as lenders are paying more for the cash they use to fund loans.

However, there are ways to keep down the cost of a remortgage.

First: use an experienced broker to sniff out the cheapest deals - it could help dramatically, although you must make sure you include all fees and charges when comparing different offers.

If you'd prefer to hang on to your savings, take a look at an "offset" mortgage where the lender sets your savings against what you owe to reduce the amount of interest paid.

You can also extend the terms of your loan, say, from 20 to 25 years.

This would reduce the monthly payment on a £100,000 mortgage at six per cent from £716 to £644.

If that's still too much, consider an interest-only loan, it'll bring the payments down to £500 a month - but start repaying the mortgage as soon as your finances improve.

Source: http://www.mirror.co.uk/news/