Although remortgaging is a sensible strategy for many borrowers, it may not suit everyone.
Here are some circumstances when remortgaging makes little or no sense.
- You have only a two or three years to go before you have paid off your loan. It may not make sense to shift your mortgage as the amount left to pay is so small that the charges for doing so will never be offset by the savings.
- Irrespective of how long you have before the loan is paid off, the amount you owe is small. Again, the savings are likely to be miniscule compared with the cost of switching.
- You are already in the middle of a deal which has hefty redemption penalties, or where the deal is over but has hanging penalties. Again, the cost of switching may not justify the benefits.
- You want to borrow more because your finances are a mess. In that case, you would probably be better off sorting out the mess first. Borrowing more is not a panacea for every problem.
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