Remortgaging the answer for school fees?

This is a great facility for coping with school fees if you move to a lender who allows you to borrow back at the original competitive rate that you agreed, such as Northern Rock, Abbey's flexi-plus range and BM Solutions' and Principality's flexible product ranges.

For many borrowers a remortgage to a simple low rate may suffice: a quarter of mortgage holders are still languishing on their lender's Standard Variable Rate (SVR) and as such may be overpaying quite unnecessarily.

A parent with a mortgage of £300,000 could save £378 a month by remortgaging from an SVR of 7.75% to a more competitive loan with a rate of 5.61%.

Over seven years this would amount to a saving of £33,933 a considerable contribution towards funding their child's school education.

Alliance and Leicester have a five year discount with a pay rate of 5.61%, overall cost for comparison 7.4% APR and arrangement fee of £999 and Norwich and Peterborough currently offers a discount for five years giving a pay rate of 5.59% Overall cost for comparison 7.2% APR with arrangement fee of £599.

A parent with a mortgage of £250,000 on SVR 7.75% with monthly payment of £1,888 could remortgage to £300,000 at a more competitive rate of anything up to 5.75% to result in monthly payments of £1,887 and a very useful £50,000 in capital. Remortgage deals are available with minimum fees.

Tucker concludes: "If you are considering taking a loan or credit at all, it is almost certain that your mortgage would offer a lower rate. Almost all borrowers will be due a remortgage in the next seven years, so it is worth factoring the school fees into your medium term plans." If you are a parent trying to work out the sums at the moment, it is also worth speaking to your child's school and finding out what payment methods they offer. With some schools you will have to pay the fees a term in advance, and others will allow you to pay on a monthly basis which can really help with budgeting.