How to Remortgage: Everything You Need to Know About Remortgaging a Property

How to Remortgage

Whether you’re a first-time homeowner or a seasoned property investor, understanding remortgaging is essential for getting the most from your home financing. Your credit history and credit rating play a key role in your remortgaging options.

This guide covers everything from what remortgaging means to when you should do it, the benefits, risks, lender options, and tips for getting the best deal. Remortgaging can help you secure a better deal on your home loan.

What Is Remortgaging?

Remortgaging is the process of replacing your current mortgage with a new one, either with your existing lender (a product transfer) or a different lender. Before formally applying, most lenders can provide an agreement in principle, which gives you an idea of how much you might be able to borrow. This may be done to secure a better rate, which can help you avoid moving onto your lender’s standard variable rate, often higher, or to release equity, or adjust your mortgage terms.

When Should You Remortgage?

1. Your fixed-rate deal is ending

Once your initial deal ends, and your existing mortgage deal expires, you’ll typically revert to your lender’s Standard Variable Rate (SVR), which is often significantly higher. Remortgaging before this happens can save you hundreds or even thousands of pounds. Securing a new deal before your current one ends can help you avoid higher rates.

2. Interest rates have dropped

If current mortgage rates are lower than your existing deal, remortgaging could reduce your monthly repayments. You can use a mortgage calculator to estimate your potential savings. Switching to a lower rate could also result in lower monthly repayments.

3. You want to borrow more

Home improvements, debt consolidation, or funding other investments? Remortgaging allows you to release equity from your property. To get started, find out how much you can borrow based on your personal and financial circumstances.

4. Your financial situation has improved

Better credit score, higher income, or reduced debt? Before applying, check your credit report with credit reference agencies such as Checkmyfile, Experian, Equifax, or TransUnion to ensure your credit profile is accurate and up to date. You may now qualify for more competitive mortgage rates.

5. You want more flexibility

Remortgaging allows you to switch between fixed, variable, tracker, or offset mortgages, depending on what suits your goals. It also gives you the opportunity to find the right mortgage for your changing needs.

Benefits of Remortgaging

Risks & Costs of Remortgaging

How Does Remortgaging Work?

1. Check your current deal

Find out when your existing deal ends and what your current rate and outstanding balance are.

2. Shop around

Compare rates across lenders, considering both headline rates and total fees. You can remortgage with your same lender or switch to a new lender, so it’s important to compare both options to find the best deal.

If you are also moving home, estate agents may ask for a mortgage in principle as part of the process.

3. Apply

When preparing your mortgage application, you’ll need to provide details about your personal and financial circumstances, including payslips, bank statements, and ID. A credit check and property valuation will follow.

4. Legal work

Your solicitor (or the lender’s free legal service) will handle the transfer and settlement of your old mortgage. The remortgaging conveyancing process involves your solicitor managing the legal transfer, including registering the new mortgage at the Land Registry. The new lender will transfer funds to pay off your old mortgage.

5. Completion

Once the lender approves your application, they will issue a mortgage offer and the process moves to completion.

The new mortgage starts, your previous loan is paid off, and any additional funds are released.

Timeframe: Typically 4–8 weeks from application to completion.

Understanding Mortgage Offers

When you receive a mortgage offer letter for your new mortgage deal, it’s important to take the time to review all the details carefully. The offer will specify how much you could borrow, the interest rate, and the length of your mortgage term, as well as outline your expected monthly payments.

Make sure you understand all the costs involved, including any arrangement fees, valuation fees, or early repayment charges that could apply if you decide to pay off your mortgage sooner than planned.

Your mortgage broker or mortgage provider can help explain the terms of the mortgage offer and answer any questions you may have. It’s wise to compare the offer against other remortgage deals to ensure you’re getting the best deal for your financial circumstances.

Consider whether the new mortgage will help you achieve your goals, such as lowering your monthly payments, shortening your mortgage term, or providing flexibility for early repayment. By thoroughly evaluating the mortgage offer, you can confidently choose the right remortgage deal for your needs.

Dealing with Your Current Lender

If you’re considering staying with your existing lender for your new mortgage, it’s a good idea to contact them early to discuss your options. Many lenders offer a range of mortgage deals, including fixed rate and variable rate products, which may be available as part of a product transfer. This can sometimes make the remortgage process quicker and simpler, as you may not need to go through a full application or pay additional legal fees.

However, it’s important to check if any early repayment charges apply to your current mortgage deal, especially if you’re switching before the end of your fixed rate period. Your current lender may also require updated financial information and will likely carry out a credit check to ensure you still meet their lending criteria.

By understanding your current lender’s process and requirements, you can make an informed decision about whether to stay with them or look for a new mortgage deal elsewhere.

Remortgaging and Property Value

The current value of your property plays a crucial role in the remortgage process and the remortgage deals available to you. If your property has increased in value since you took out your current mortgage, you may benefit from a lower loan-to-value ratio, which can unlock access to the best deal and more competitive interest rates. This could also allow you to borrow more if you need extra funds for home improvements or other purposes.

On the other hand, if your property value has decreased, you might find your remortgage options more limited, and you could face higher interest rates. It’s essential to get an accurate valuation as part of the remortgage process, as this will determine how much you could borrow and which remortgage deals you qualify for. By understanding how your property’s value affects your mortgage, you can make better decisions and secure the most suitable deal for your needs.

Registering Your New Mortgage

After your new mortgage is in place and the remortgage process is complete, it’s important to ensure your new mortgage is properly registered with the Land Registry. This step updates the property register with your new mortgage details and officially records your lender’s interest in the property. Your solicitor or conveyancer will usually handle this process, making sure all the necessary documentation is submitted and the registration is completed accurately.

Proper registration protects your interests and ensures there are no issues with your property’s legal status in the future. If you have any questions about the process or need to provide additional information, your legal representative will guide you through what’s required. Keeping your mortgage details up to date with the Land Registry is a key part of finalising your remortgage and safeguarding your property rights.

Remortgaging and Fees

When considering a new mortgage deal, it’s essential to factor in all the costs associated with the remortgage process. Common fees include arrangement fees for the new mortgage, valuation fees to assess your property’s value, and solicitor’s fees for handling the legal work.

Some lenders offer fee-free remortgage deals or may cover basic legal work as an incentive, so it’s worth comparing offers to find the best deal for your situation.

Don’t forget to check if your current mortgage deal includes an early repayment charge, as this can significantly affect the overall cost of switching to a new mortgage. By using mortgage calculators and seeking advice from a mortgage broker, you can get a clear picture of all the costs involved and make sure your new mortgage is truly cost-effective.

Carefully weighing up the fees and charges will help you save money and choose the right remortgage deal for your needs.

Popular Remortgage Lenders

Expert Tips to Maximise Your Remortgage

• Start early: Begin comparing deals 3–6 months before your current deal ends.
• Know your equity: Higher equity (e.g. 60%+ LTV) opens access to the best rates.
• Factor in all fees: A lower rate with high fees might not be cheaper overall.
• Improve your credit: Clear debts and avoid missed payments before applying.
• Use a mortgage broker: Brokers can access exclusive deals and handle the process for you.
• Stay or switch?: Sometimes your existing lender offers competitive “product transfers” without credit checks or legal fees.

Get help from an experienced mortgage broker.

You can speak to one of our specialist mortgage brokers who would be able to guide you through the process. They will advise if there is a lender available and the maximum loan amount based on your circumstances. We are a whole of market mortgage brokerage with access to all lenders. Call us on 01332 470400 or complete the form with your details for us to give you a call back.

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