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Remortgage (Part 1)

Charlie Huxley explains how the remortgage process works. Episode one of two, recorded in July 2025.

What is a remortgage and how does the process of remortgaging work in the UK?

A remortgage simply means switching your existing mortgage to a new deal, either with your current lender or a different one. People usually remortgage to get a better deal, release equity from their home, or change the terms of the mortgage.

How long does it take to remortgage? 

A mortgage application can take up to around two weeks to be approved from submission. After approval, the mortgage offer is issued, and you can lock in a new rate up to six months before your current deal ends, as mortgage offers are usually valid for up to six months. 

How often can I remortgage my property?

You can remortgage your property at any time; however, it generally only makes sense to do this towards the end of your current deal to avoid early repayment charges. Some products are more flexible and don’t have these penalties.

What are the main reasons why people choose to remortgage? 

The most common reason is to save money and get a better deal, especially when a fixed rate ends and you move onto a higher standard variable rate. Remortgaging to a better deal can significantly reduce monthly payments. Another major reason is to release equity, borrowing more against your home’s value, often to fund home improvements. Some people remortgage to change their term, either shortening it to pay off the loan faster or extending it to reduce monthly costs. Others desire more flexibility, like switching to an offset mortgage or moving from interest-only to repayment.

Can I remortgage to consolidate my debts?

Yes, you can remortgage to consolidate debts, which means rolling unsecured debts like credit card balances or personal loans into your mortgage. This can simplify finances and potentially lower monthly outgoings. However, it’s crucial to understand that you are turning short-term debt into long-term secured debt, so proper advice is essential to ensure it’s the right move for your situation.

What factors should I consider when deciding whether to remortgage?

You need to factor in your current mortgage deal: are you on a fixed rate ending soon, or on a standard variable rate that might be costing more? Consider current interest rates available in the market, as even a small drop can lead to significant savings over two or five years. Also, weigh up fees and costs such as arrangement fees, valuation fees, or legal costs against any potential savings. Finally, think about your financial goals, and a broker can help you achieve them.

What are the advantages and disadvantages of fixed-rate versus variable-rate remortgages?

Fixed-rate mortgages:

  • Advantages: Provide certainty as your mortgage payments remain the same for the fixed term (usually two or five years, but can be up to 10 years). This makes budgeting easier and protects you from interest rate rises.
  • Disadvantages: You might miss out if rates drop. They can also come with early repayment charges if you switch before the term ends, and sometimes the initial rate itself might be slightly higher than a variable option.

Variable-rate mortgages:

  • Advantages: Often track the Bank of England base rate, so if interest rates drop, your monthly payments could go down.
  • Disadvantages: Payments can also go up if rates rise, leading to unpredictability that can make budgeting harder, especially in volatile markets.

Ultimately, the choice depends on your risk tolerance and what you need from your mortgage.

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What happens to my existing mortgage when I remortgage?

When you remortgage, your existing mortgage is paid off in full using the funds from your new mortgage deal. If you’re staying with the same lender, it’s often called a product transfer, which is a quick and simple process. If you’re switching to a new lender, they will arrange to pay off your old mortgage directly, handled by a solicitor as part of the legal process. Once the old mortgage is cleared, your new mortgage begins with new terms, a new rate, and likely a new monthly payment. It’s important to time this correctly, ideally lining up the new deal to start as soon as the old one ends to avoid falling onto the lender’s higher standard variable rate. A good broker can help ensure these timings fit to avoid unnecessary costs.

What happens if I don’t remortgage after my deal expires?

If you don’t remortgage when your current deal ends, you’ll usually be moved onto the lender’s standard variable rate (SVR). SVRs are typically much higher than fixed or tracker products and can change at any time, potentially causing your monthly payments to increase significantly with little warning. While there are no early repayment charges on the SVR, offering flexibility, most people don’t want to stay on it for long, as it’s rarely the best value. It’s a good idea to start looking around three to six months before your current deal ends to line up a new mortgage in time, making the process smoother and potentially saving you money.

Can I remortgage if I have bad credit?

Yes, you can remortgage if you have had bad credit, though it might be more challenging. Lenders assess your credit history to determine lending risk. Missed payments, defaults, or CCJs could limit your options. However, there are specialist lenders who work with people who have poor credit. They might offer slightly higher rates or require you to have more equity in your home. The key is to work with a mortgage broker who understands this market and can match you with flexible lenders that don’t charge an excessively high premium in rate.

Will I have to pay any fees or penalties when remortgaging?

Yes, there are fees and penalties to consider when remortgaging.

  • Early Repayment Charge (ERC): You might face an ERC if you leave your current mortgage deal before its term ends. This is usually a percentage of your outstanding balance and can be costly.
  • Lender’s Arrangement Fee: A fee for setting up the new deal.
  • Valuation Fee: All remortgages require a valuation to assess your property’s value before mortgage approval.
  • Legal Fees: Costs associated with solicitors.

Some lenders offer incentives where the valuation or legal fees might be free. It’s always important to compare the total cost, not just the interest rate, when making a decision.

How can a mortgage broker help? Anything else we need to know?

A mortgage broker can be a huge help when considering remortgaging. A good mortgage broker will aim to stay in touch with you for the entire time you own the property and can save you thousands of pounds over a 15- or 20-year period.

Mortgage brokers have access to a wider range of lenders, including some deals not available directly to the public, which means they might be able to find you a better rate. They will also help navigate all the paperwork, explain the fine print, and manage the application process from start to finish, taking away much of the stress.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.

YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

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