Credit will be secured by a mortgage on your property. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Written quotations are available from individual lenders. Loans are subject to status and valuation and are not available to persons under the age of 18. All rates are subject to change without notice. Please check all rates and terms with your lender or financial adviser before undertaking any borrowing.
Remortgaging is when you switch from your existing mortgage deal to a new mortgage deal, without moving home.
You can remortgage to a different lender or move to an alternative deal with your existing lender (also known as a product transfer).
Technically you can remortgage at almost any time (subject to terms and fees), but many people will remortgage to a new fixed or variable rate once their existing mortgage deal ends. If they don’t remortgage, they will revert to their lender’s Standard Variable Rate (SVR) which is likely to be significantly more expensive.
Other people may remortgage in the middle of an existing deal if there’s a cheaper and more suitable option available, while others may remortgage and borrow more to release equity from their home.
It’s a good idea to start thinking about remortgaging around six months before you want the new deal to start. This gives you plenty of time to compare options from your existing lender and other lenders and, once you’ve found a deal, you can arrange for it to start the day after your existing mortgage ends.
Depending on the lender, you may be able to lock in a rate several months before you want the new deal to start, which protects you from any rate rises. However, if rates fall, you may be able to cancel it at least 14 days before it starts in favour of a new, cheaper deal. The exact details can vary between lenders, so check the terms of your agreement for more information on this.
When you remortgage, lenders will need to conduct the usual credit and affordability checks to make sure you can afford the payments.
However, if you remortgage with your existing lender, these checks are likely to be less rigorous (unless you want to borrow more on your mortgage, for example).
There are several costs to factor in when you remortgage. Lenders will charge different fees, but they could include:
Bear in mind that, if you remortgage to a deal with your existing lender, you may only need to pay an arrangement or product fee.
You may be able to add some of these fees to your mortgage, but this means you’ll pay interest on them. As a result, it’s often worth paying any fees upfront if possible.
In the most straightforward cases, you can simply borrow the balance left outstanding on your mortgage.
However, if your financial situation has changed significantly since your initial mortgage application, you may find that you’re not eligible for a mortgage that covers your remaining balance.
This could happen if you don’t pass a lender’s affordability checks because your income has fallen, for example, or if property prices have dropped. If your home loses value, your outstanding mortgage balance will make up a larger proportion of your property’s value. This could push you into a higher loan-to-value (LTV) threshold, which may affect the interest charged and the amount you can afford to borrow.
In the very worst cases, you could end up owing more on your mortgage than your home is worth. This is known as negative equity and is a particular risk if you took out a low-deposit mortgage.
You may buy your house for £400,000 with a 10% deposit of £40,000 and a mortgage of £360,000. When you remortgage, your outstanding mortgage balance may be £340,000. If property prices have remained stable, you now have £60,000 equity in the property (15%) which could allow you to access more attractive mortgage deals.
But, if the price of your property has dropped to £370,000, for example, you will still owe £340,000 on your mortgage which means you now own less than 10% equity in your home (£30,000). As a result, your remortgage deal will need to finance a larger proportion of your property, unless you make an overpayment to reduce the amount owed.
Whatever your circumstances and requirements, a mortgage broker can help you find some of the best remortgage deals for you.
It may be possible to borrow more than your outstanding mortgage balance when you remortgage, if you want to release some money to pay for home improvements, for example.
This is known as a “further advance” if you borrow more from your existing lender.
But, before adding to your mortgage, it’s crucial to weigh up all the costs involved as this could be more expensive than other forms of borrowing.
The time it takes to remortgage depends on your individual circumstances and whether you choose to remortgage with your existing lender or a new lender.
It will usually be quickest to take out a product transfer with your current lender. Because the lender ran affordability checks and did a property valuation when you took out your initial mortgage, it may not need to perform all these checks again. As a result, it may be possible to apply for a remortgage online or over the phone and be approved within hours.
Bear in mind that if your situation has changed or if you want to change your mortgage (by borrowing more or adding/removing an individual from the agreement, for example), the process is likely to take longer and involve more checks.
If you want to remortgage with a different lender, it could take six to eight weeks for your application to be processed and accepted. The lender will run credit and affordability checks, as well as checks on the property, to make sure you meet its criteria.
Mortgage brokers remove a lot of the paperwork and hassle of getting a mortgage, as well as helping you access exclusive products and rates that aren’t available to the public. Mortgage brokers are regulated by the Financial Conduct Authority (FCA) and are required to pass specific qualifications before they can give you advice.
Get friendly, expert advice free of charge as a visitor of MoneyfactsCompare
Mortgage Advice Bureau have 1,600 UK advisers with 200 awards between them.
Speak to an award-winning mortgage broker today.
Call 0808 149 9177 or request a callback
Mortgage Advice Bureau offers fee free mortgage advice for MoneyfactsCompare visitors that call on 0808 149 9177. If you contact Mortgage Advice Bureau outside of these channels you may incur a fee of up to 1%. Lines are open Monday to Friday 8am to 8pm and Saturday 9am to 1pm excluding bank holidays. Calls may be recorded.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There are several reasons why you may want to remortgage, such as to:
It’s up to you whether you remortgage with your current lender or with a new lender.
Remortgaging with the same lender can be the quickest and most convenient option as it requires less paperwork and fewer checks than moving to a new lender. It will also usually involve fewer fees and, depending on your situation, the lender may not run a credit check so your credit history may not be affected.
Furthermore, some lenders may offer more attractive rates to their existing customers. As a result, choosing a new deal with your current lender could be the cheapest and most suitable option for you.
However, this isn’t guaranteed. Other lenders may offer more attractive remortgage rates, even if you factor in any additional fees involved in switching lender.
The process of remortgaging to a new lender is likely to take longer and will require more checks than staying with your existing lender, but it could be a cheaper option if you can find a suitable deal with lower rates.
This is why it’s so important to compare mortgage rates if you’re planning to remortgage, looking at deals from your current lender as well as the rest of the market. It can be useful to speak to a mortgage broker to help navigate your way through the deals on offer to you.
Read more: Should I switch mortgage lenders?
To find the best remortgage deal, it’s crucial to think about a range of factors. Below is a checklist of some points to consider:
If you secure a remortgage offer a few months before it’s due to start, it’s worth keeping an eye on the market to see if rates fall and if you could switch to a cheaper deal. Don’t rely on your lender telling you if a better deal appears and, if you use a broker, ask if they will check the market for you. Before switching remortgage deals, check the terms of the lender and note that any fees you’ve already paid may not be refundable.
The best remortgage rates are currently sitting above 4%, with five-year fixed deals offering a lower rate than two-year fixes. See the most up-to-date list of the top remortgage rates on our charts.
Note that the remortgage rate you qualify for will depend on your credit history, your financial circumstances and the amount of equity you own in your property.
If you’re remortgaging with the same lender and not borrowing any more or changing the terms of your mortgage, you may not need a solicitor.
However, if you’re remortgaging with a new lender or your situation is a bit more complex, you will typically need a solicitor to take care of the legalities. Some lenders will cover the necessary legal costs as part of their remortgage deal, on condition that you use their chosen solicitor.
If you're moving to a different provider and/or trying to move to a lower LTV tier, you're likely to need a new valuation on your property. The cost of this may be included in a remortgage deal. If you’re sticking with your current provider, you may not need another valuation.
It may be possible to get a better rate when you remortgage, but this isn’t guaranteed. For example, you could get a lower rate if mortgage rates have fallen since you took out your existing deal, or if you’re eligible for a deal with a lower loan-to-value. You may also be able to find better rates by remortgaging to a different lender with more competitive deals.
However, mortgage rates are currently significantly higher than they were over two years ago. This means that many borrowers who fixed in early 2022 or before may find they have no option but to remortgage to a higher rate than they are currently paying.
It’s worth thinking about your remortgage options around six months before your current deal ends. This allows you to compare remortgage deals and, if necessary, speak to a broker, without any time pressure. Lenders may allow you to accept a deal several months in advance. However, if you see a more attractive deal later on, you may be able to cancel your existing agreement and switch to the new deal.
Bear in mind it’s possible to remortgage in the middle of a fixed deal, but you’ll need to factor in the cost of an early repayment charge.
This is personal preference. If you remortgage and fix rates every two years, you could benefit from lower payments sooner if mortgage rates fall. On the other hand, if mortgage rates rise since you took out your initial fixed deal, your payments could rise if you have to remortgage to a higher rate.
By contrast, if you choose to fix and remortgage every five years, for example, this can offer peace of mind that your payments won’t rise during that period. But this also means you can’t take advantage of cheaper deals if rates fall (unless you leave your deal early and incur the additional charges).
When you remortgage, lenders will run a credit check and other affordability checks. They will look at your income, expenditure and existing debt to make sure you can afford the monthly repayments. You may need to provide documents, such as payslips, to support this information. Lenders may also run a property valuation.
Bear in mind that these checks may only apply if you remortgage to a different lender. If you stay with the same lender, there may be fewer checks.
It’s possible for your remortgage application to be declined if you don’t meet a lender’s eligibility requirements, or if it believes you can’t afford to repay the mortgage, for example. To minimise the chances of this happening, it’s worth checking your credit score and getting your finances in order before applying. You can also get an agreement in principle to see if you can borrow the amount you need.
Most lenders set a maximum age for taking out a mortgage or a maximum age by which you need to repay your mortgage, which could be 75 or 80 years old, for example. However, some lenders may set lower age limits.
When you remortgage, you need to make sure you meet the age requirements of the lender and choose a mortgage term that ends before you reach the age limit. Furthermore, you’ll need to prove to the lender that you can continue making your mortgage payments if the term extends past your retirement age, whether that’s via a pension or other means. It’s worth seeking advice if you think you may be paying off your mortgage in your retirement.