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How Remortgaging Works

Remortgaging involves switching your existing mortgage to a new deal, either with your current lender or a different one. This process can help you secure better interest rates, reduce monthly payments, or release equity from your property.

When Should You Consider Remortgaging?

  • Your current fixed-rate deal is coming to an end
  • Interest rates have fallen since you took out your mortgage
  • You want to release equity for home improvements or other purposes
  • Your credit score has improved significantly
  • You wish to reduce your monthly payments
  • You want to pay off your mortgage faster

Benefits of Remortgaging

Lower Monthly Payments: Securing a better interest rate can significantly reduce your monthly mortgage payments, freeing up money for other expenses.

Equity Release: If your property has increased in value, you might be able to borrow additional funds against this equity.

Better Terms: You might find a mortgage with more favourable terms, such as overpayment options or flexible payment schedules.

Important Considerations

Remember that you may face early repayment charges with your current lender, and there will be costs associated with remortgaging, including valuation fees, legal costs, and arrangement fees. Always factor these into your calculations.

Types of Remortgage Deals

Fixed-Rate Mortgages

Fixed-rate mortgages offer the security of knowing exactly what your monthly payments will be for a set period, typically 2-5 years. This protection against interest rate rises makes budgeting easier.

Variable-Rate Mortgages

Variable rates can go up or down during the term. While this means payments could increase, you might benefit if rates fall. Types include:

  • Standard Variable Rate (SVR): Your lender’s basic rate, often higher than other options
  • Tracker Mortgages: Follow the Bank of England base rate plus a set margin
  • Discount Mortgages: Offer a discount off the lender’s SVR for a set period

Loan-to-Value (LTV) Ratios

Your LTV ratio affects the rates available to you. Lower LTV ratios typically qualify for better rates:

LTV Range Typical Rate Range Description
Up to 60% Best rates available Excellent equity position
60-75% Very competitive rates Good equity position
75-85% Standard rates Moderate equity
85-95% Higher rates Limited equity

Frequently Asked Questions

How long does the remortgaging process take?
The remortgaging process typically takes 4-8 weeks from application to completion. This includes time for valuation, legal work, and final approval. You can apply up to 4 months before your current deal ends.
What costs are involved in remortgaging?
Costs can include arrangement fees (£0-£2,000+), valuation fees (£150-£1,500), legal fees (£300-£800), and potential early repayment charges on your existing mortgage. Some lenders offer fee-free deals or allow you to add fees to your mortgage.
Can I remortgage if I’m self-employed?
Yes, but you’ll typically need to provide 2-3 years of accounts or tax returns. Some specialist lenders cater specifically to self-employed borrowers and may accept 1 year’s accounts or use bank statements to assess affordability.
What happens if my property value has decreased?
If your property value has fallen, your LTV ratio will be higher, potentially limiting your remortgage options or resulting in higher rates. However, you may still be able to remortgage, especially if you’re moving to a better rate than your current SVR.
Should I use a mortgage broker?
A mortgage broker can access deals not available directly to consumers and help navigate complex situations. They typically charge a fee (around 0.3-1% of the loan) but may save you more than this through better rates or cashback offers.
Can I borrow more money when remortgaging?
Yes, if you have sufficient equity and can afford the additional borrowing. This is called “further advance” or “additional borrowing” and is subject to affordability assessments and the lender’s maximum LTV limits.

Steps to Remortgage Successfully

1. Review Your Current Situation

Check your current mortgage details, including the outstanding balance, current rate, and when your deal ends. Calculate your current LTV ratio and check for any early repayment charges.

2. Research Your Options

Compare rates from different lenders, considering both the interest rate and associated fees. Look at the overall cost over the deal period, not just the headline rate.

3. Check Your Credit Score

Obtain your credit report and address any issues before applying. A higher credit score can qualify you for better rates and increase your chances of approval.

4. Gather Required Documents

Prepare necessary documentation including payslips, bank statements, P60s, and proof of any other income or regular outgoings.

5. Apply for Your New Mortgage

Submit your application with all required documentation. Your new lender will arrange a valuation of your property and conduct affordability assessments.

6. Complete the Legal Process

Once approved, solicitors will handle the legal transfer from your old lender to your new one. You’ll receive a new mortgage offer and completion will be arranged.

References

  1. Bank of England. (2025). Monetary Policy Report. Bank of England Quarterly Bulletin, Q2 2025.
  2. Financial Conduct Authority. (2025). Mortgage Market Study: Final Report. FCA Publications.
  3. UK Finance. (2025). Mortgage Trends Review: Annual Analysis of UK Mortgage Market. UK Finance Research.
  4. Council of Mortgage Lenders. (2024). Remortgaging in the UK: Market Analysis and Consumer Behaviour. CML Research Paper 2024-03.
  5. HM Treasury. (2024). Review of Mortgage Market Regulation: Impact Assessment. Government Economic Service.
  6. Building Societies Association. (2025). Mortgage Market Quarterly: Q1 2025 Review. BSA Economic Research.
  7. Money and Pensions Service. (2025). Guide to Mortgages and Remortgaging. MaPS Consumer Guidance.

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