Remortgaging to pay off debt

If you’re a homeowner remortgaging can, if the right mortgage is found, improve your situation.

A remortgage is when you replace your existing mortgage with a new one. It can mean changing products with your existing lender, or switching to another mortgage lender completely. You should always get expert debt advice before going ahead with a remortgage.

There are two main ways that remortgaging can improve your situation:

• You can release the equity that’s in your property in a lump sum and use this to repay your other debts
• It might reduce your monthly mortgage payment, freeing up money to repay your other debts

How remortgaging works

A mortgage lender will base your application on a number of things including:

• Your credit file
• The value of your house
• How much you want to borrow

If you’re in arrears with your mortgage or any other debts, your credit rating will have been affected and it’s unlikely that you’ll get a good mortgage offer.

If you’re currently on a mortgage deal that hasn’t ended, for example a fixed term for three years, there’ll probably be an early redemption fee to pay if you remortgage.