Remortgaging means moving your mortgage to a new deal, either with your current lender or a different lender. It can be a way to reduce monthly payments, avoid a lender’s standard variable rate, release equity or adjust your mortgage term. However, remortgaging is not always cheaper, and the right decision depends on rates, fees, your income, credit profile and long-term plans.
What is remortgaging?
When you remortgage, you replace your existing mortgage deal with another one. You might stay with the same lender through a product transfer, or you might move to a new lender. If you move lenders, the new lender pays off your old mortgage and you begin making payments under the new agreement.
Remortgaging is different from moving home. You usually remain in the same property, but the finance attached to it changes. Some people remortgage at the end of a fixed rate, while others remortgage to borrow more or change the structure of their loan.
When should you consider remortgaging?
Many homeowners start reviewing options around six months before their current deal ends. This gives time to compare deals, collect documents and avoid being moved onto a standard variable rate, which may be more expensive than fixed or tracker alternatives.
You might consider remortgaging if:
- Your fixed, tracker or discounted mortgage deal is ending.
- Your home has increased in value and your loan-to-value has improved.
- You want to switch from variable to fixed payments for certainty.
- You want to borrow more for home improvements.
- You want to change the mortgage term.
- Your current lender’s follow-on rate is uncompetitive.
Remortgaging to save money
The most common reason to remortgage is to reduce costs. A lower interest rate can reduce monthly payments, but the headline rate is only part of the calculation. Arrangement fees, valuation fees, legal fees and early repayment charges can affect whether a deal is genuinely cheaper.
Always compare the total cost over the period you expect to keep the deal. A mortgage with a slightly higher rate but no product fee may be cheaper than a lower-rate deal with a large fee, especially on smaller mortgage balances.
Product transfer vs full remortgage
A product transfer is when you switch to a new deal with your existing lender. It can be simpler because there may be less paperwork, no legal transfer and no full property valuation. However, your existing lender may not offer the best rate for your circumstances.
A full remortgage to a new lender may open more options, but it usually involves more checks. The new lender will assess affordability, property value, credit history and documents. If your income has changed, you have taken on new debts or your property value has fallen, a full remortgage may be harder.
Costs to check before remortgaging
- Early repayment charge: A fee for leaving your existing deal early.
- Product or arrangement fee: Charged by the new lender for the mortgage deal.
- Valuation fee: Some lenders charge to assess the property value.
- Legal fees: May apply when changing lender, although some deals include basic legal work.
- Exit or admin fee: Some lenders charge when closing the old mortgage account.
Can you remortgage early?
You can usually start exploring options before your deal ends, but completing too early may trigger an early repayment charge. Some lenders allow you to reserve a new rate months in advance. This can be useful if rates are moving, but you should understand whether you can switch to a better rate later if pricing improves.
Remortgaging to release equity
If your home is worth more than your remaining mortgage, you may have equity. Some homeowners remortgage to release part of that equity for renovations, debt consolidation or other major costs. This increases borrowing and may increase total interest paid over the life of the mortgage.
Debt consolidation through a mortgage can reduce monthly payments but may convert short-term unsecured debt into long-term secured debt. That can cost more overall and puts your home at risk if repayments are not maintained. Get regulated advice before using a mortgage to consolidate debts.
Remortgaging with poor credit
Poor credit can reduce your options, but it does not always prevent remortgaging. Lenders will look at the type, age and severity of credit issues. A missed mobile phone payment from several years ago is different from recent mortgage arrears or unpaid defaults.
If you have adverse credit, check your reports before applying, avoid multiple applications and consider specialist advice. Staying with your current lender through a product transfer may sometimes be simpler, but it may not be the cheapest option.
How to prepare for a remortgage
- Check your current deal end date and any early repayment charge.
- Review your property value and outstanding balance.
- Check your credit reports for errors.
- Collect payslips, bank statements and proof of income.
- Compare total costs, not just interest rates.
- Consider whether you need payment certainty or flexibility.
Frequently asked questions
How often can you remortgage?
You can remortgage whenever a lender accepts you, but switching too often may be costly if fees or early repayment charges apply.
Will remortgaging affect my credit score?
A full remortgage application usually involves credit checks. The impact is typically manageable if you apply carefully, but multiple applications in a short period can be unhelpful.
Is remortgaging always cheaper?
No. Fees, early repayment charges and your future plans can make a lower rate less valuable than it first appears.
Can I remortgage if my income has fallen?
Possibly, but affordability may be harder. A product transfer with your existing lender may involve fewer checks than moving to a new lender.
Final thoughts
Remortgaging can be a powerful way to control mortgage costs, but it should be based on the total cost and your personal situation. Start early, compare properly and avoid making decisions based only on the lowest advertised rate.
Disclaimer: This article is for general information only and does not constitute financial, mortgage, tax or legal advice. Your home may be repossessed if you do not keep up repayments on your mortgage.