Remortgaging your home allows you to switch to a new mortgage deal for a property you already own.
You can either move to a new lender (known as a remortgage) or change to a different deal with your current lender (known as a product transfer).
When you come to the end of your existing mortgage deal, you're often moved to your lender's standard variable rate (SVR) which is usually higher than other rates available. People normally remortgage in order to get a lower rate and cheaper repayments.
Our expert mortgage broker, Mojo, can help compare remortgage deals across the whole of the market to find the right deal for you and your individual circumstances.
Your current deal is ending - once your current deal ends, you'll be moved on to your lender's standard variable rate (SVR). This is normally higher than other rates available in the market so it's usually best to remortgage to another deal to save money.
To find a better rate - remortgaging may allow you to get a better rate than you're currently on (particularly if you are currently on your lender's SVR). It's best to speak with a whole-of-market broker who can compare mortgages to find the best deal for you.
Your property value has increased - remortgage to a lower loan-to-value (LTV) ratio as this may get you access to better rates.
To release equity - If you want to borrow more money, you can do this by releasing equity from your property when you remortgage. This involves switching to a higher LTV deal.
To shorten your mortgage term - When you remortgage, you can switch to a deal with a shorter mortgage term. This means you're paying off your mortgage in a shorter time period with higher monthly repayments, but you'll end up paying less in interest overall.
To improve your chances of getting the best remortgage deal, you should consider doing the following:
Have a high credit-score - improving your credit score will make you more appealing to mortgage lenders when it comes to borrowing money as they can trust that you'll make each monthly repayment.
Look for remortgages with lower fees - watch out for the remortgage deals with a lower interest rate because although it seems to be a good deal at first, the fees can add up.
Reduce your loan-to-value (LTV) - a lower loan-to-value ratio means you could be offered better remortgage deals, so try and borrow less if you can.
Lock in a remortgage deal early - you can lock in a new rate up to six months in advance and then switch when your current mortgage term ends. Switching before the deal ends means you're likely to have to pay early repayment charges (ERCs).
Shop around - it might be tempting to stay with the same mortgage lender, but you're better off comparing remortgage deals from a range of lenders for a better chance of finding the best deal for you. Our expert mortgage broker can help you with this.
Administration fees - many remortgage deals come with product fees, which can be known as administration fees, arrangement fees or booking fees. You can usually add these to your loan but you should avoid doing this if possible as you’ll end up paying interest on them for the life of the loan.
Valuation and solicitor fees - a lender will always want to value your property when deciding how much and whether to lend to you and there will be legal work involved in completing the remortgage. However, remortgage deals often come with free valuation and legal fees.
Early repayment charges - you’ll pay an early repayment charge (ERC) if you switch your mortgage before your initial deal ends so ideally you should wait until these no longer apply where possible. It’s only worth switching before this if you’ll save more money by remortgaging than you’ll be charged for exiting your existing deal.
It depends on your personal circumstances, it's best to get advice through an equity release advisor before making a decision.
Some people use the equity to pay for home improvements or have disposable cash for other expenses. If you decide to take out the equity, it means you'll need to borrow more than you currently owe on your existing mortgage. And whether you'll be accepted for a larger mortgage depends on your affordability.
Use our equity release calculator provided in partnership with our broker Responsible Equity Release.
Lenders usually want to value your home before they offer you a new deal, especially when you switch to them from another mortgage company. They may not do this in person but do a “desktop valuation” instead, which involves looking at recent sale prices.
Or a surveyor might do a “drive-by” valuation where they look at the property from the outside only.
It's usually quicker to remortgage than it is to take out a mortgage to buy a new home. It's especially quick if you're getting a new deal with the same lender and not borrowing any extra money.
Typically, a straightforward remortgage takes about four to eight weeks but this can be longer if your application is rejected or there are any problems.
There is legal work involved in completing a remortgage so a solicitor will likely need to be involved. Luckily most lenders include a legal package when you remortgage which includes the cost of the solicitor.
When you remortgage, you'll normally need to provide:
Proof of income
Proof of address
Your latest mortgage statement
Some brokers allow you to upload these in advance which is a good way to reduce the time it takes to apply.
There are lots of mortgage brokers to choose from, but it's normally best to speak to a whole-of-market one if possible. This is because they can look at deals from lots of different lenders across the market to get you the best remortgage rate possible.
It's also important to remember that some brokers will charge an advice fee while others will offer advice free-of-charge. The latter type will only make money via commission from the lender so this doesn't cost you anything extra.
We've partnered with Mojo Mortgages, an award-winning and free mortgage broker, who can get you the best remortgage deal.
Yes, it is perfectly possible to remortgage when self-employed. However, if you were in full-time employment when you took out your previous mortgage, you may find you’re offered less attractive rates and are subject to more stringent affordability checks.
Lenders will need to see proof of income, and they will want evidence that you’ve got a healthy stream of work coming in. Your credit score will be more important than ever, so make sure it’s as high as possible before you apply.
Yes, you can remortgage to a new lender. People often do this if another provide is offering a more favourable deal, or they haven't had a good experience with their current lender.
You can also stay with your current lender but switch to a new deal. This is known as a product transfer.
Applying for any form of credit involves a hard search on your credit record that can impact your score. If your application is successful, any dip in your credit score will usually only be temporary and it should start to improve again as you make your monthly repayments on time.
Unsuccessful applications will have a bigger negative impact on your credit score, making it harder to get accepted for future deals. Try to space out applications so there is a six-month gap after any rejections.
Before you apply for a remortgage, check your credit files with the three credit reference agencies (Experian, Equifax and TransUnion) to make sure you’re in the best shape to get a deal.
Yes, you can get a mortgage offer from a lender before you need it. Most UK mortgage offers last six months so it's normally a good idea to look into remortgage options around six months before the end of your current deal.
It is always good to plan ahead and make sure you have an offer in place before your current deal ends so you don’t end up moving onto your lender’s standard variable rate.
If your remortgage application is rejected, it's best not to apply for another mortgage straight away. Instead, stay with your existing lenders standard variable rate until you know you'll get accepted in the future.
That's why it's important to understand why your application was refused. For example, if you have low credit rating, take the time to build your credit score back up.
When you're looking for a remortgage deal, make sure you're in the best financial shape you can be. Pay attention to your credit score and make sure it is high enough for the lender to accept you. The cheapest remortgage rates are only available to people with an excellent credit rating.
Lenders may also consider how much equity you have in your property. If your LTV ratio is still quite high, you could use savings to give yourself a bigger deposit. This will make you a more attractive borrower and you should get access to better rates.
A mortgage broker can also advise you on other ways you can improve your chances of being accepted.