Remortgages

Your mortgage is likely your biggest financial commitment, so it makes sense to shop around for a better deal. Some homeowners can save themselves thousands of pounds each year by remortgaging!

The main reasons you might want to remortgage are:

• To save money with a better deal
  If you’re remortgaging to get a better deal and lower your monthly repayments, you have two options:
  
  1. Get a ‘product transfer’ with your current lender
  You’ll basically be swapping the mortgage you have for another one, without borrowing more money. This one’s pretty straightforward.
  
  2. Get a new mortgage with another lender
  When you go to someone else for another mortgage, your new lender will pay the outstanding loan you owe to your old lender (done through a solicitor). You’ll then pay back your new lender under the new agreement. 
  
  When you remortgage this way, you’re usually limited by a 90% loan-to-value (LTV). So you’ll need to own at least 10% of your home outright (known as equity), or put down a cash deposit.

• To borrow more money
  If you’re remortgaging to take money out of your home, the process is the same as if you were swapping your mortgage. But any extra money that you borrow needs to be handled by a solicitor.
  
  Again, you’ll be limited by the lender’s LTV. And the amount they offer could vary depending on what you plan to use the money for. 

• To pay off debts
  Depending on your situation, remortgaging can be a great way to consolidate your debts. Lots of people do this to clear credit cards and loans and pay everything from one place. Because mortgage terms are so long, it can be a good way to reduce your monthly bills.
  
  What you’ll end up paying will all depend on how much you want to borrow and what interest rate you get. You’ll need to be mindful of how much debt you’ll be rolling into your mortgage, as if your monthly repayments increase by too much then you risk not being able to afford them.

Depending on your situation, remortgaging can be a great way to consolidate your debts. Lots of people do this to clear credit cards and loans and pay everything from one place - their mortgage. Because mortgage terms are so long, it can be a more affordable way to reduce your monthly bills.

What you’ll end up paying will all depend on how much you want to borrow and what interest rate you get. You’ll need to be mindful of how much debt you’ll be rolling into your mortgage, as if your monthly repayments increase by too much then you risk not being able to afford them. Read more in our Guide: Debt Consolidation Options for Homeowners.

Like any mortgage, remortgaging comes with fees and payments. The specific amount you’ll have to pay will depend on you and your unique situation, but here’s what you can expect:

Valuation fees

It’s not always necessary to get a valuation when you remortgage, but if you’re moving to a new lender they might want a valuation of your property before they offer you a remortgage. That’s because they want to know the property’s value. Valuation fees vary depending on your property size, but it’s usually around £250 to £1,500.

Legal fees

Same as with your first mortgage, you’ll need a solicitor and conveyancer. Because the work is less than when you first got a mortgage, the costs are usually less when you remortgage.

Arrangement fee

The lender will charge this to finalise your new mortgage. The amount varies depending on your lender and mortgage. Some lenders charge this as a fixed amount, or a percentage of the total sum you’re borrowing. 

Booking fee

Not all lenders ask for this but some lenders add a booking fee to the arrangement fee. This is usually non-refundable and usually around £100 to £200. 

Depending on your current mortgage, you also might need to pay these two things:

1. Exit fees: A cost for the admin work when you pay off your mortgage in full, or remortgage with a new lender. 

2. Early repayment charges (ERCs): Another fee you might be asked to pay if you exit your current mortgage early.

Read more in our Complete Remortgaging Guide.

Generally, it takes less time to remortgage than to take out a mortgage on a new property. An average mortgage takes around three months. Whereas a remortgage can take between four to six weeks, depending on your individual circumstances and the lender who you choose.

A good way to speed up the process is to get all your paperwork ready ahead of time. A mortgage broker can help you do this, and they’ll be able to recommend the lenders most likely to accept you. If you have bad credit history or a complex income then it’s especially important to get help from an advisor. We can help with that! Our platform matches to you the ideal broker for your situation. Make an enquiry.

No, you don’t need to put down a deposit when remortgaging. You can use equity you have in your home as a deposit. 

Equity is the cash difference between how much your home is worth, and how much you have left to pay on your mortgage. Let's say you sold your house for £500,000 with £300,000 still left to pay on your mortgage. Your equity would be £200,000. You won't have equity from an interest-only mortgage unless your house has gone up in value.

However, if you’re looking to significantly reduce your monthly repayments and get the very best rates, putting down an additional deposit may be an option. Doing this lowers your LTV (the size of the loan compared to the value of the property), giving you access to the better deals. A professional mortgage broker can help you to understand your options.

Yes, you can absolutely remortgage with the same lender. This is known as a ‘product transfer’. Sometimes, a product transfer can help to reduce the fees associated with remortgaging. 

Another benefit of a product transfer is some lenders won’t carry out new affordability checks because you have a history of making repayments with them. A product transfer can also help to minimise or eliminate early-exit fees or early repayment charges. But it all depends on the lender. So it’s best to talk to a specialist broker to make sure you’re getting the best deal available to you.

Yes, you can remortgage with bad credit. But like getting any kind of mortgage when you have bad credit, it’s best to work with a specialist mortgage broker who has a proven track record of getting people with bad credit a mortgage. They’ll know which lenders to approach and make sure you get the right mortgage.

Read more in our Guide: How to Remortgage with Bad Credit.

When you’re on a fixed-rate mortgage, you’re agreeing to pay the lender at a set rate for a set period of time. You’re making a commitment to remain on that mortgage in order to pay the same each month.

If you want to leave a fixed-rate mortgage before the term is up, you’ll usually have to pay a fee for leaving early. These fees can be pretty steep, sometimes in the thousands of pounds, so you’ll need to weigh up whether your new mortgage is worth the high charges.

It’s sometimes better to wait until your fixed rate deal’s ended before getting another mortgage. If you’re looking to change while still in your current deal, you should speak to a mortgage expert to find out your options.

Read our Complete Remortgaging Guide.

If you’re remortgaging with a new lender then you’ll probably need a solicitor to do your paperwork. 

‍If you’re staying with your current lender and just borrowing more money or getting a different deal, then you probably won’t need a solicitor.

‍It can be tricky to know whether to stick with your current lender or switch, which is where your mortgage advisor comes in! They’ll look at your options and let you know whether it’s cheaper to move to another lender or stay put.