How Does Remortgaging Work?
Remortgaging is where you take out a new mortgage with a new lender on a property you already own and have a mortgage on. The new mortgage takes the place of the mortgage you originally had on the property.
When Is It Suitable?
Remortgaging may be suitable for you if:
- The introductory deal on your current mortgage is due to end soon and you’d like to avoid being transferred onto your lender’s SVR (standard variable rate)
- You want to consolidate multiple other debts
- You need money to fund home improvements
- You have a large expense coming up - like a wedding or school fees, or you want to help your children with a deposit, etc.
Remortgaging may be unsuitable for you if:
- You need a small mortgage below £25,000
- You need to borrow a very high percentage of your property’s value
- You took out your current mortgage very recently
- Your mortgage has high ERCs (early repayment charges)
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Why Use a Remortgage Broker like John Charcol?
We Take Care of Everything
With over 45 years of service, we've seen it all. We can save you money, time and make remortgaging your property easy.
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We Give Personal, Expert Advice
We work around your schedule to help you arrange a mortgage that suits your circumstances, no matter how complex.
1. First Call
When you contact us, we’ll arrange an appointment between you and one of our advisers – this can be over the phone or face to face. Your adviser will ask you some questions and, once they have all the right information, they’ll go away and find you the best mortgage for your current and future needs. They’ll then organise a follow up appointment to tell you about their recommendation.
2. Decision in Principle
After your adviser has presented you with their recommendation and you’re happy to proceed, they’ll work on securing your DIP (Decision in Principle). Your DIP is a promise from the lender that they’ll loan you the money on the condition that the information you’ve provided is correct and subject to a valuation on the property.
3. Pre-Application and Submission
Once the lender secures your DIP, we’ll start to prepare your mortgage application. We’ll send you a pack that explains all the different documents the lender needs. You’ll be assigned a client relationship manager who’ll go through your documents and get everything ready for submission. Your adviser will then submit your full mortgage application.
4. Lender Underwriting and Valuation
The lender carries out a process called “underwriting” where they check all the information and documents you’ve provided in your application. They’ll also instruct a mortgage valuation on the property to make sure there are no significant problems with it. Sometimes a lender will only instruct a desktop valuation – rather than a physical valuation – as your property would have likely had a valuation and internal inspection when you took out your first mortgage.
5. Mortgage Offer
Following a successful underwriting process and valuation, the lender will accept your application and send you a mortgage offer. They’ll also send a copy to us.
After you accept the mortgage offer, you’ll go through conveyancing which is where a solicitor arranges all the legal paperwork so you can transfer from one lender to another.
Finally, after you’ve signed all the paperwork, your solicitor will set a date to draw down the new money to clear the outstanding balance with your current lender. Any excess funds will be returned to you. This is called completion.
Is Remortgaging a Good Idea?
|You Can Save Money||When you come off your introductory deal you’ll go onto your lender’s SVR, which will be higher than your original rate. Switching to a new deal can help you make significant savings.|
|It Can Help You Avoid Moving Home||Remortgaging and adapting or adding an extension to your current home can be cheaper than to move home entirely.|
|You Can Raise Money||Remortgaging for an amount that’s larger than the outstanding balance on your remaining mortgage can help you pay for major outgoings, rather than borrowing separately - and in some cases more expensively - from other sources.|
|It Can Help You Accommodate a Change in Your Circumstances||If your financial situation has changed, you may need a new mortgage that accommodates different needs – like higher overpayments or a lower monthly rate. Remortgaging is a way to replace your current mortgage with one that better suits your requirements.|
|You May End Up Paying More Overall When You Consolidate Debts||Remortgaging can help you pay off urgent debts but, as you would typically have a mortgage for a long period of time, you could end up paying more interest in the long term even though mortgage interest rates are usually lower than those for a lot of other types of loan.|
|You Could Face ERCs (Early Repayment Charges)||If you try remortgaging too early - i.e. before the introductory deal on your current mortgage ends - you could face ERCs which can make it expensive.|
|It Can Take Longer than a Product Transfer with a Further Advance||When you switch to a new deal with a new lender, that lender has to underwrite your application and you have to go through the legal part of the process – although this isn't as extensive as when you purchase a new property. Therefore, if you need funds quickly, you may find a product transfer with a further advance more suitable as there’s no underwriting or conveyancing involved.|
Average Remortgage Fees and Costs
|Lender's Product Fee||Valuation Fees||Legal Fees||Booking Fees|
|£0 - £2,000*||£0 - £1,500*||£0 - £500 (Plus VAT)*||£99 - £250*|
How Much Could You Save?
What our customers say
John Charcol0330 057 5173£
Cutlers Exchange, 123 HoundsditchLondonEC3A 7BU
1923 Total reviews
Razz provided fantastic support throughout the whole process, Customer service is second to none. We thought applying for a mortgage was going to be very stressful but thanks to Razz this was not the case. Highly recommend.Posted
Daniel Dordan-Pike is exceptional. Quick, effective and proactive with everything from start to finish. We discussed my options on Wednesday afternoon and he had me a mortgage offer by Friday Morning of the same week!!! Unbelievable, never going anywhere else again! Then his support staff, Samanatha Walker and Samantha Remfry where just as good - Totally top draw company and people.Posted
This company are the best, They are very professional and supportive, during the process of buying our own house, from the first step to the final step, Adrian has been very helpful, when I am confused or don't understand anything, I will give him a ring and he picks up straight away as i called him. Adrian and Megan have been of a very great help, updating us and most especially the challenging times when we almost gave up, they were there to support us. I recommend John Charcol and I will use them again and again. Thank you guys you are so amazing.Posted
I worked with Lawrence to find both (i) a mortgage for a new house purchase and (ii) to put in place a let-mortgage on my existing flat. Lawrence delivered a great result and was quite simply outstanding throughout. I would recommend him to anyone (and have!)Posted
Razz was our mortgage advisor and was great from the outset! He took on board everything we asked for and was able to secure us a product that suited our circumstances. Razz was always on the end of the phone for reassurance throughout our whole buying process, even when I was having a meltdown when our exchange of contracts fell through although this wasn't even his remit! thankfully with his calming voice and professionalism he reassured me it was just a blip, we are thankfully is our dream home and we have Razz to thank massively for all his help guidance and support on our journey. Highly recommended and we will definitely be in touch in the future, Charcol you have a diamond in Razz 🙂! ⭐⭐⭐⭐⭐Posted
I spoke to Manny about possible mortgage options. The service was excellent. Very knowledgeable. It was great to receive that level of service. I have high confidence in taking things forward.Posted
We recently completed the purchase of a home with Sarah Dormer acting as our mortgage broker. She is wonderful! From our first conversation in 2019 when we were just thinking of buying a home, to helping advise us throughout the pandemic in 2020, and into 2021, Sarah has been incredible. As first-time buyers we felt like she was truly invested in our success. She and her colleague Michelle were quick to respond to any question or update to our mortgage offer, so much so that our estate agent asked if she could refer Sarah's details to her other clients. Buying a home can be stressful and uncertain, but we always felt confident that Sarah and Michelle could help guide us through it. Thank you so much!Posted
Louise Cheatle and Daniel Dordan-Pike have been extremely helpful and diligent in getting our sales and purchase complete, even with he mortgage company putting a spanner in at the last minute! thank you both for always being available and following up to ensure the mortgage was sorted out.Posted
Just fantastic service from start to finish. Steven was extremely knowledgeable and was able to take through all options to ensure we were comfortable with our decision.Posted
Excellent Service. They are truly worth every penny.Posted
How Long Does Remortgaging Your Home Take?
Remortgaging takes about 4 – 6 weeks on average. It can take slightly less or slightly more.
Do I Need to Wait Until My Current Deal Ends?
Remortgaging before your introductory deal ends is possible, however it’s likely you’ll face ERCs which can make doing this expensive.
You can start arranging your new mortgage up to 6 months before your current introductory rate ends. If it’s ready early, your solicitor can wait until any ERC period passes before taking the final steps to put it in place.
Can I Raise Money on My Current Property to Buy Another House?
Remortgaging can be a way to raise funds to buy another property, whether it’s a second home, holiday let, buy-to-let, etc. These funds can form part or all of the deposit on another property or, if you raise enough, you can buy the property outright with cash. You’ll need to declare to HMRC and/or your lender(s) which property will be your new main residence.
If you want to release equity from your existing property to buy another and convert your existing property to a buy-to-let at the same time, you’ll go through a process called let to buy.
Will Having Bad Credit Affect My Options?
Having bad credit will limit your choice of lenders, depending on the extent of the bad credit and how recent it was.
Can Remortgaging Help Me Pay Off Debt?
Remortgaging can help you pay off your debt in the sense that it can allow you to consolidate multiple other debts – e.g. car loan, credit card balances. The new mortgage that you would take out would need to be for an amount that's higher than the amount remaining on your current mortgage. This would enable you to release some equity that you could use to pay off your debts.
It’s important to note that remortgaging to consolidate debts can sometimes result in you paying more overall as, although mortgages have lower interest rates than a lot of other loans, they come with longer terms which means you earn and pay interest for a longer period.
Nevertheless, this may be a suitable option for you if your current debts have high interest rates or you need to pay them off soon.
How Does Remortgaging for Home Improvements Work?
Remortgaging can be a way for you to borrow some extra money to fund home improvements. Essentially, you borrow more on the new mortgage than the amount you have outstanding on your existing mortgage. This extra amount can then be used to pay for improvements on your property.
One major benefit of raising funds this way is that all of your mortgage will be on the same introductory product rather than some of it being on a further advance rate, as these can often be higher than introductory rates. Another benefit is that the value of your property should increase after the work's done - assuming there are no sudden decreases in property values.
Will I Need a Solicitor When Remortgaging?
You’ll need a solicitor as you still have to go through conveyancing, although it will be much more straightforward than buying a new property since there won’t be an exchange of contracts or change of ownership.
Will Remortgaging Be Cheaper than Being Transferred onto My Lender’s SVR?
A lender’s SVR is often at least 2% higher than their current products. Many people choose to switch to a new deal with a different lender when their existing introductory deal ends as another lender’s deal will almost certainly always be cheaper than going onto their existing lender's SVR.
We can find you a solicitor to manage the conveyancing part of the process with JC Legal. We choose from an exclusive panel of carefully selected solicitors and conveyancers, saving you time and ensuring you receive excellent service.
It’s easy to overlook your property as part of your finances, but your home is probably the biggest asset you have. Release money from your home with John Charcol's partnership with Key Retirement. Find out more and start the process today.