Day 1 Remortgages Explained

A day 1 remortgage (or day one remortgage) is when a homeowner switches their mortgage within the first 6 months of purchasing the property. You can apply for a Day 1 remortgage on or after completion of the property purchase.

Up until the 2008 financial crash, remortgaging a property within the first 6 months was not uncommon. However, post-crash, this practice has become much less common as a measure to protect lenders from incurring significant losses. Some buyers had purchased properties at a discount and then remortgaged within the first 6 months of ownership with a larger home loan. This often resulted in the property owner having no personal capital invested in the property.

During the financial crash, many of these properties fell into negative equity, and if the owner defaulted on their payments, the lender faced the risk of repossessing the property at a loss.

Despite its complex history, the Day 1 remortgage is still available under certain circumstances. Several niche lenders offer this type of remortgage, governed by strict guidelines set out by the CML (Council of Mortgage Lenders).

Day 1 remortgages are often used for buy to let purposes. If you’ve purchased a property quickly with cash – for example, at auction – and you want to let the property, you can use a Day 1 remortgage to switch it to a buy to let mortgage shortly after the purchase. 

Doing this can help you avoid tying up all your cash in an investment property, allowing you to free up funds for other opportunities. 

Because you’ll likely want to move quickly, working with our experienced mortgage advisers can help speed up the process and ensure you find the best remortgage deal to suit your needs.

Essentially, you can apply for a day 1 remortgage between day one and the end of month 6 after purchasing a property. If you wait longer than 6 months, you can apply for a normal remortgage.

Day 1 remortgages offer much the same interest rates as other mortgage products. What will impact your application are factors such as your credit history and equity in the property. 

Your credit history will be reviewed when the lender conducts a credit search. If you have a history of poor credit or issues with managing your finances, this could influence the terms of your Day 1 remortgage, including the interest rate you’re offered. 

The equity you have in the property acts as a form of deposit; the more equity you hold, the stronger your position will be when applying. 

Other factors lenders will consider include: 

• The type of property you’re looking to remortgage
• The reason for your remortgage
• Whether the property is for residential use or a buy to let investment

Once you have applied, it typically takes around 4 – 6 weeks to receive formal notice of a mortgage offer. 

If you’re applying for a day 1 remortgage, you may want to consider using the services of a mortgage broker. An experienced broker has in-depth knowledge of the mortgage industry and can apply for products you’re most likely to be approved for. 

If time is of the essence, the professional support of our advisers at John Charcol can help keep the process moving quickly and efficiently. You’ll also have the confidence that your application has been thoroughly completed by mortgage experts.

A day 1 remortgage is a niche product that only some lenders offer, so it can be difficult to research effectively online. Therefore, it’s best to use a mortgage broker like John Charcol if you’re looking for a Day 1 remortgage as we can point you towards the right providers with criteria that’s compatible with your situation.  

Get a day 1 remortgage 

Day 1 remortgages can help you raise funds to complete building work, pay out other inheritors, or expand your property portfolio. Whatever your reason for seeking a Day 1 remortgage, it’s likely you’ll want to move quickly. Having an expert like John Charcol to support your application and guide you through the process can help ensure everything runs smoothly and efficiently. Contact us on 0808 239 9021.