If you are like most homeowners, you know how important it can be to save money when you can. One strategy you may not have considered for saving money is to remortgage your home. Remortgage – or refinancing – can save you money in several ways which we will discuss in this blog.
1. Lower your interest rate.
Currently mortgage rates are the lowest they’ve been in years. If you currently have a mortgage at a higher interest rate either because of the market rates at the time you got your mortgage – or because you didn’t qualify for the best rate at the time of getting your mortgage – then something as simple as a refinance could save you money.
Depending on the difference in the rate between your current mortgage and your refinanced mortgage, you could save hundreds or even thousands of dollars a year.
2. Pay down your principal faster.
Now suppose you are able to lower your interest rate but you decide to make the same mortgage payments that you are currently making. The result will be that you will start paying down your principal faster.
So even though your monthly budget won’t change, you could end up paying off your house years sooner – saving you money over the long term.
3. Consolidate high-interest debt.
The third way that you can save money with a remortgage is to using refinancing to consolidate high-interest debt. If you have high interest credit cards or other loans and you have sufficient equity in your home, you can roll those other high-intertest debts into your mortgage and substantially reduce the amount of interest that you pay.
In fact, not only can you reduce the amount of interest, but your monthly payments on your total debt could end up being reduced as well.
Is remortgaging the right option for me?
To find out whether remortgaging is the right option for you, it is important to sit down with a professional mortgage broker who can go through the numbers. Your broker can determine how much this strategy will save you after you account for any penalty there may be for breaking your current mortgage. Your broker can also suggest other strategies if he or she believes that there is a better solution for your particular circumstances.
If you would like to learn more about how you can save money with a remortgage, contact Akal Mortgages today.
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