Remortgage Pitfalls: What Can Go Wrong and How to Avoid Them

Thinking about swapping your current mortgage for a better deal? It sounds like a no‑brainer, but many people end up paying more because they overlook a few key details. In this guide we’ll point out the usual traps and show you how to keep more money in your pocket.

Typical Mistakes Homeowners Make

First, people often chase the lowest advertised rate without checking the whole picture. A lower interest rate can look great, but if the lender adds hefty arrangement fees, early repayment charges, or a higher total loan amount, the savings disappear fast.

Second, many forget to factor in the Loan‑to‑Value (LTV) ratio. If you try to remortgage with too little equity, lenders may offer a higher rate or demand mortgage insurance, which adds to the cost.

Third, the timing of the switch matters. Some borrowers miss out on the “early‑exit” window of their current deal and end up paying an exit fee that wipes out any benefit from the new rate.

Lastly, ignoring the impact on your credit score can bite you later. Each new mortgage application triggers a hard credit check, and several checks in a short period can lower your score enough to affect the rate you get.

Smart Steps to Dodge the Traps

Start by writing down the full cost of your existing mortgage – rate, fees, and any early‑repayment penalties. Then, when you look at new offers, ask the lender for an APR breakdown that includes every charge. Compare the APRs, not just the headline rates.

Check how much equity you have. If you’re below the 20 % mark, try to boost it with a small extra payment before you apply. More equity usually means better rates and fewer extra fees.

Plan the switch well before your current deal ends. Aim to start the new application at least three months ahead, giving you time to negotiate and avoid last‑minute penalties.

Use a single credit‑check mortgage broker if you can. Brokers can pull multiple offers with one hard inquiry, protecting your score while still giving you a range of options.

Finally, read the fine print on any “flexible” features. Some deals let you over‑pay without penalty, while others lock you into strict terms that can cost extra if your circumstances change.

By keeping an eye on the total cost, timing, and your equity level, you’ll be in a much stronger position to get a genuine improvement on your mortgage. Avoiding these common pitfalls can save you hundreds, maybe even thousands, over the life of the loan.