Remortgaging can enable you to:
get a better interest rate
borrow more money for home improvements or a house move
release equity in your home
change the length of your mortgage term.
You can book in a mortgage deal up to six months in advance.
You can book in a mortgage deal 3-6 months before your current deal ends.
And if mortgage rates drop before your new deal’s due to start, you’re free to book another one.
Find out more in our guide: How does remortgaging work?
Remortgaging can take up to 3 months, though on average it takes between 4-8 weeks.
It's a good idea to lock in the best rate before your mortgage ends, so that you don't end up on your lender's standard variable rate, which could cost you hundreds of pounds more in interest.
Find out more about the standard variable rate and what it means for your mortgage.
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Approach existing lender: This is called a 'product transfer' and it can be a fast way to remortgage. However, they may not be able to offer you the best rates, so it's a good idea to shop around.
Work with a mortgage broker: You can find the best deals available to you using a fee-free, whole of market broker. They'll scour the market on your behalf and can find the best rates within a couple of days.
Approach banks and building societies: You can contact individual lenders to find out their best deals. However, this approach can be time-consuming if you're contacting multiple lenders.
Find out how much you could borrow
Sort out any existing debt
Check your credit score
Apply for a mortgage agreement in principle
Contact a broker to get all your options
Do your own mortgage research
Double check the rates before you sign up
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We know remortgaging can seem like a complex process, so let's take some of the hassle out of it.
Why do people remortgage?
People often remortgage to avoid moving onto their lender's higher standard variable rate at the end of their deal but there are other reasons for doing so:
To borrow more, for home renovations or a house move, for example
To get a better mortgage rate, because the equity in their home has grown and their loan to value ratio has improved
To extend a mortgage term, so that the monthly payments are lower
To get more certainty over mortgage repayments, for example moving from a tracker to a fixed deal
To get more flexibility with a new deal, for example one that allows overpayments, underpayments or mortgage holidays
How does remortgaging work?
If you’re remortgaging with a different lender, you take out a new mortgage to pay off your old one.
You then make repayments to your new lender.
If you’re switching to a new deal with your existing lender, the terms of your mortgage simply change. You continue to make your repayments as before but at the new the amount if it’s gone up or down.
There are normally early repayment charges (ERCs) to switch before the end of the initial period with fixed-rate deals and sometimes variable ones.
For this reason, it’s best to start the remortgage process just before your current deal ends. If everything goes smoothly, the new one will start as soon as the old one ends.
Find out more in our guide: How does remortgaging work?
How does loan-to-value impact remortgaging?
Loan to value (LTV) is the percentage of borrowing you need to take out compared to the value of your home.
So if your home is worth £500,000, but the mortgage you need for it is £200,000, your loan to value would be 40%, as you already own 60% of your property.
Lenders offer better mortgage rates as your loan to value decreases, as it's less risky for them to loan you money.
LTVs at 60% or below are optimal in terms of getting the best mortgage deals.
When should you remortgage?
You should always set up your next mortgage deal well in advance of your current one ending.
It's a good idea to start looking for new deals 6 months in advance of your current one ending, to that you can secure the best possible rates early.
If you remortgage less than 30 days before your current deal is due to end, you may end up on your current lender's standard variable rate, which will cost you hundreds of pounds in interest, while the new deal comes through.
Ideally, it's best to have your new deal set up around 2-3 months before your current one ends.
Will mortgage rates go down this year?
Buyers holding out for lower mortgage rates in 2024 may be disappointed, as they are unlikely to decline much further this year, even if inflation and the Base Rate edge lower.
Our Executive Director of Research, Richard Donnell, says: ‘Expectations of lower interest rates are already priced into fixed rate mortgages today.
‘Lower interest rates would likely result in further modest declines in mortgage rates but how far depends on how low money markets see base rates falling.
‘Economists currently expect base rates to fall to 3.5% by the end of 2025, which would imply mortgage rates remaining in and around the 4%+ range.’
What’s the fastest way to remortgage?
The fastest way to remortgage is to go with your existing lender. This is called a 'product transfer'. However, they may not always be able to offer you the best rates, so it's a good idea to shop around and see what other lenders can offer you.
The fastest way to find the best deals available to you is to use a fee-free, whole of market broker.
They'll scour the market on your behalf and should be able to let you know the best rates for you within a couple of days.
It's best to have a deal in place before your current deal ends, so that you can avoid going on to your current lender's standard variable rate, which is likely to cost £100s more in interest.