Remortgaging is one of the most effective ways to reduce your monthly outgoings or unlock equity in your home. Yet many homeowners let their mortgage roll onto an expensive standard variable rate simply because they do not realise how straightforward the switch can be.
What Is Remortgaging?
Remortgaging means replacing your current mortgage with a new one, either with the same lender or a different one. Your home stays the same — only the loan secured against it changes. The goal is usually to get a better interest rate, reduce your monthly payments, or release some of the equity you have built up.
When Should You Remortgage?
There are several situations where remortgaging makes good financial sense:
Your Fixed Rate Is Ending
This is the most common reason to remortgage. When your introductory fixed or tracker deal expires, your lender will move you onto their standard variable rate (SVR), which is almost always significantly higher. Switching to a new deal before this happens can save you hundreds of pounds a month.
Start comparing deals three to six months before your current rate ends. Most mortgage offers are valid for three to six months, so you can lock in a rate early without any risk.
Your Property Value Has Increased
If your home is now worth more than when you bought it, your loan-to-value (LTV) ratio will have improved. A lower LTV means access to better rates. For example, if you originally borrowed at 90% LTV and your home has risen in value enough to bring you down to 75% LTV, you could qualify for considerably cheaper deals.
Use our loan-to-value calculator to check your current LTV.
Better Rates Are Available
Market conditions change constantly. Even if your current deal has not ended, it is worth checking whether the savings from a better rate outweigh any early repayment charges.
You Want to Release Equity
Remortgaging lets you borrow more against your property to fund home improvements, consolidate debts, or cover other large expenses. Keep in mind that borrowing more increases your overall debt and the total interest you pay over the life of the mortgage.
How the Remortgaging Process Works
- Review your current deal — Check when your existing rate ends, what your outstanding balance is, and whether any early repayment charges apply.
- Check your property value — Get a rough idea using online tools and recent sold prices in your area.
- Compare deals — Use our mortgage calculator to model different rates, terms, and fees. Consider using a whole-of-market broker.
- Apply for a new mortgage — Submit your application with proof of income, bank statements, and ID. The new lender will carry out a valuation and credit check.
- Receive your mortgage offer — Once approved, you will receive a formal offer detailing the terms.
- Legal work — A conveyancing solicitor handles the transfer of the mortgage from your old lender to the new one. Many lenders include free legal work in their remortgage packages.
- Completion — The new lender pays off your old mortgage and the new deal begins.
The entire process typically takes 4–8 weeks.
Costs Involved in Remortgaging
Switching mortgages is not always free. Make sure you factor in these potential costs:
| Cost | Typical range |
|---|---|
| Arrangement fee (new mortgage) | £500 – £2,000 |
| Valuation fee | £0 – £500 (often free) |
| Legal / conveyancing fees | £0 – £1,000 (often free with lender) |
| Early repayment charge (current deal) | 1% – 5% of outstanding balance |
| Exit fee (current lender) | £50 – £300 |
Always calculate the total cost of switching against the savings you would make over the term of the new deal. A lower rate means nothing if the fees wipe out the saving.
Product Transfer vs Remortgaging
When your deal ends, your existing lender will usually offer you a product transfer — a new rate without the need to reapply, provide documents, or instruct a solicitor. Product transfers are quicker and simpler, but they limit you to one lender’s range of deals.
| Product transfer | Remortgage to new lender | |
|---|---|---|
| Speed | Days | 4–8 weeks |
| Legal fees | None | Often included free |
| Valuation | Usually not required | Usually required |
| Choice of deals | One lender only | Whole market |
| Paperwork | Minimal | Full application |
A product transfer is convenient, but always compare your lender’s offer against the wider market before accepting. The difference can be substantial.
How to Compare Remortgage Deals
When comparing deals, look beyond the headline interest rate:
- Total cost over the deal period — Multiply the monthly payment by the number of months and add all fees. This gives you the true cost.
- Arrangement fees — A slightly higher rate with no fee can be cheaper overall than a rock-bottom rate with a £2,000 arrangement fee, especially on smaller mortgages.
- Cashback or incentives — Some deals include cashback, free valuations, or free legal work that reduce the overall cost.
- Early repayment charges on the new deal — Check the ERCs in case your circumstances change during the fixed period.
- Portability — If you might move during the deal, check whether the mortgage can be transferred to a new property.
When Remortgaging Might Not Be Worth It
Remortgaging is not always the right move. Think carefully if:
- Early repayment charges are high — If you are still within a fixed-rate period, the ERC could outweigh any savings.
- Your circumstances have changed — If your income has dropped or your credit score has worsened, you may not qualify for a better deal than what you currently have.
- Your mortgage balance is small — On a small remaining balance, arrangement fees can cancel out rate savings quickly.
- You are close to the end of your mortgage term — The costs of switching may not be recouped in the time you have left.
If a full remortgage does not stack up, a product transfer with your existing lender is often the simplest and most cost-effective option.
Regularly reviewing your mortgage is one of the simplest ways to keep your finances in shape. Use our mortgage calculator to model different scenarios and see how much you could save by switching.