1. Save money by paying less interest.

Your mortgage is probably your largest debt, so you want to get the best interest rate possible. Interest rates may have gone down since you first purchased your home. You may have improved your credit rating. You may have improved you income enough to qualify for a lower interest rate. A lower interest rate reduces your monthly payment amount. It can also be used to shorten the term of your loan.

2. Get cash for home improvements, university fees, or other needs.

Need cash for home improvements, to start or expand a business, or to pay off credit card, car, or other non-deductible loans? If your home has increased in value, you can use a remortgage to get extra cash.

You could increase your loan amount, giving you cash that you can use any way you want. And since your interest rate is lower, your monthly payments often stay the same or may even drop, depending on how much cash you get out.

3. Consolidate high-interest debts into a new home loan.

Credit card debt, car loans, bank loans if you have high-interest debts, you can consolidate them into your mortgage payment when you remortgage. The advantage of consolidating your debts into your home mortgage is that not only are your interest payments lower, but they are also tax deductible.

4. Adjust your mortgage term.

When you remortgage your home, you can take the opportunity to change your mortgage term. Maybe you originally took out a 15-year mortgage, but want to remortgage to a longer loan term so you can have more cash each month. Or maybe you want to reduce your mortgage term from 30 years to 15 or even 10 years, and get your mortgage paid off more quickly.

5. Change your type of mortgage.

One of the biggest reasons for remortgaging is to switch from a fixed-rate loan to a variable-rate loan or to switch from a variable-rate loan to a fixed-rate. (With a fixed-rate loan, your mortgage payments are always the same, while with a variable one, they vary over time.)

If you plan to stay in your home for five years or less, you can save money by remortgaging to a variable-rate loan, because interest rates usually start out lower for these loans. On the other hand, if you already have a variable-rate loan and the interest is higher than the current fixed-loan rate, it can save money to remortgage with a fixed-loan rate.

6. Eliminate private mortgage insurance.

Are you paying money every month for private mortgage insurance to cover your mortgage payments should you become redundant, have health problems, or are otherwise unable to make your mortgage payments?

The sooner your mortgage is paid off, the sooner you can save that money. Remortgaging to a shorter term means you get your mortgage paid off sooner and can drop your private mortgage insurance.

T. O' Donnell http://www.ttremortgages.co.uk is a licenced credit broker based in London, UK.

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