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Everything you need to know about remortgaging

26/03/25

Everything You Need to Know About Remortgaging: A Complete Guide for Homeowners

Are you thinking about remortgaging your property? Whether you’re looking for a better deal, need to release equity, or simply want to change your lender, remortgaging could be the key to unlocking financial flexibility. In this guide, we’ll break down everything you need to know about remortgaging in the UK, including the process, benefits, and tips to get the best deal.

What is Remortgaging?

Remortgaging is the process of switching your current mortgage to a new lender or product, without moving home. It can help you secure a lower interest rate, reduce monthly payments, or access extra funds by releasing equity from your property.

In simple terms, you’re replacing your existing mortgage with a new one. It’s an excellent way to save money, get better terms, or restructure your finances to meet your needs.

Why Should You Consider Remortgaging?

There are several reasons why homeowners decide to remortgage their properties. Here are a few of the most common:

  1. To Secure a Better Interest Rate
    One of the most common reasons to remortgage is to get a better deal on your interest rate. If your current deal is coming to an end, remortgaging can allow you to lock in a lower rate, potentially saving you thousands over the long term.
  2. To Release Equity
    If your property has increased in value, remortgaging allows you to release some of that equity. You can use the extra funds for home improvements, paying off debts, or other financial goals.
  3. To Reduce Monthly Payments
    If you’re struggling with monthly mortgage payments, remortgaging can help lower them by extending the loan term or switching to a more affordable deal.
  4. To Switch to a Fixed Rate Mortgage
    If you’re currently on a variable rate mortgage and are worried about future interest rate hikes, switching to a fixed-rate deal can provide stability and peace of mind.
  5. To Change Mortgage Lenders
    If you’re not happy with your current lender or feel you could get a better deal elsewhere, remortgaging offers the chance to find a more competitive lender.

How Does the Remortgaging Process Work?

The process of remortgaging in the UK is similar to getting your original mortgage. Here’s a step-by-step breakdown:

  1. Evaluate Your Current Mortgage Deal
    Before you start the remortgaging process, review your current mortgage deal. Take note of your interest rate, any early repayment charges (ERCs), and how much is left on your loan.
  2. Check Your Credit Score
    Your credit score plays a significant role in the interest rate you’ll receive when remortgaging. Ensure your score is in good standing before applying for a new mortgage deal.
  3. Research Lenders and Mortgage Products
    Take the time to shop around and compare mortgage products. Consider the interest rates, fees, and terms offered by different lenders to find the best deal.
  4. Get an Agreement in Principle
    An Agreement in Principle (AIP) is a statement from a lender saying that they would, in theory, lend you a certain amount based on your financial situation. It’s a good way to check what you might be able to borrow before applying for a full mortgage.
  5. Apply for the New Mortgage
    Once you’ve found the best deal, you can apply for the remortgage. Your lender will assess your finances, including your credit score, income, and property details.
  6. Valuation and Survey
    The lender may require a property valuation to assess its current market value. This helps them determine how much they are willing to lend.
  7. Exchange and Completion
    Once everything is in place, the new lender will pay off your old mortgage, and your new mortgage will begin. This process can take a few weeks, but once complete, you’ll start paying your new lender under the terms of your remortgage.

Key Factors to Consider Before Remortgaging

Before making the decision to remortgage, it’s important to weigh a few key factors:

  • Early Repayment Charges (ERCs): Check if your current mortgage deal has any early repayment charges that could make remortgaging expensive in the short term.
  • Fees and Costs: Look for hidden costs such as arrangement fees, legal fees, and valuation fees. These can add up quickly, so make sure you factor them into your decision.
  • Your Long-Term Financial Goals: Remortgaging can have both short-term and long-term implications, so think about how it fits with your financial goals. For example, releasing equity may be a great option if you need funds for home improvements, but it could extend your mortgage term.
  • Fixed vs. Variable Rate: Decide whether a fixed or variable rate is best for you. A fixed rate offers stability, while a variable rate may give you more flexibility (but with the risk of changing rates).

When Should You Remortgage?

The best time to remortgage depends on your personal circumstances. However, here are a few key signs that it might be time to consider remortgaging:

  • Your current deal is ending soon
    When your initial deal comes to an end, you could be moved onto a higher standard variable rate (SVR). Remortgaging could help you avoid this increase.
  • Your property has increased in value
    If your home has gained equity, remortgaging could help you access that value, potentially securing better terms or releasing funds.
  • Interest rates are low
    If interest rates are low, remortgaging could help you lock in a favourable rate before they rise again.

Conclusion: Is Remortgaging Right for You?

Remortgaging is a powerful financial tool that can help you save money, access extra funds, and improve your overall financial situation. Whether you want to secure a better interest rate, release equity, or switch lenders, remortgaging offers many benefits for homeowners.

Before deciding to remortgage, make sure to assess your current mortgage, review any fees, and shop around for the best deals. If you’re unsure about the process or need professional guidance, don’t hesitate to speak with a mortgage advisor.

Need help with remortgaging? Contact us today for expert advice and to explore the best mortgage deals available to you!

A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME OR PROPERTY. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

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.