Many people assume that remortgaging will always save them money. It is normally the reason that people do remortgage, but there can be hidden costs which are not always noticed until it is too late.
The costs will tend to be a charge from your current lender and fees from the new one. It is therefore worth looking in to this before you change.
Your current lender may charge you if you are locked in to a fixed fee period. They may also charge you fees to cover the cost of administration if you move. The new lender will be likely to charge you administration fees for opening the new account. If you want the option of paying the mortgage off early, they may also charge you for that as well. It is therefore important to factor these things in, when you are calculating whether it is good, financially for you to switch mortgages.
You can start by using a mortgage calculator to see how much money you will save from the switch. This is likely to be because the interest rate is lower and so your monthly interest payments will be lower. Think about how long you will need to stay at this lower rate to cover the cost of the fees that you have had to pay.
It is worth considering that the rates could change. Of course, it might be a fixed rate deal that you are thinking of and then you will know exactly how much you will be paying for a certain time period. However, if it is not, then there is always a chance the rate will change and also after the fixed rate end you will move on to the standard rate. Think about what rates have done in the past and what they have done in recent times and use that to predict the future. It could also be good to read some financial websites and see what the experts are predicting as that can help your decision. Remember though, that it is ultimately your decision and your responsibility and so make sure you make a wise one.
It can be a bit of a gamble because you can never be sure exactly what will happen in the future. However, as long as you are fully aware of what costs you will have to pay and calculate whether it seems to be worth it, then you will know where you stand and have all the information that you need to make an informed decision.