What Is Remortgaging and How Does It Work?
Remortgaging is the process of changing your mortgage on your existing property to a new one, switching from one mortgage lender to another. This new mortgage takes the place of the previous mortgage you had on the property. Many homeowners choose to remortgage when coming to the end of their existing rate, looking for better mortgage deals or planning to borrow more money against a property.
When Is Remortgaging 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 debts
- You need money to fund home improvements
- You have a large expense coming up - such as a wedding or school fees, or you want to help your children with a deposit, etc
- Your property has increased in value and you want to benefit from a lower rate by going onto a lower LTV (loan-to-value) product
- Your existing lender’s product transfer rate is high and remortgaging would be more cost-effective
Remortgaging may be unsuitable for you if:
- You need a small mortgage below £20,000
- You took out your current mortgage within the last 6 months
- Your mortgage has high ERCs (early repayment charges)
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What Are Current Remortgage Rates?
Remortgage rates and deals change all the time because of market conditions. You should be able to find remortgage rates between 4.5% and 6% (06/2023), though this will vary based on your circumstances and which lender you use.
How Do I Get the Best Deal on a Remortgage?
If you want to find the best remortgage deal for your situation, you should start by contacting a broker. Brokers have access to a wider range of lenders than you would by applying yourself and we have the experience to help you find better remortgage deals. You can also improve the remortgage rates and deals available to you by ensuring that your credit history is positive, as well as putting forward a bigger deposit.
Compare Remortgage Rates
Compare the best remortgage rates and cheapest deals currently on the market.
Why Use a Remortgage Broker like John Charcol?
We Manage the Entire Process for You
Remortgaging can be stressful, but we take care of every aspect - from application and submission to conveyancing and protection.
We Have Thousands of Satisfied Clients
Not only do we have over 1,800 5 star reviews, we have 45 years’ experience in saving our customers time and money when they remortgage.
We Give Advice Tailored to Your Circumstances
Whatever your situation, we can help - with specialist lenders and expert brokers for all types of remortgage situations.
Expert Tip - Nick Mendes, John Charcol. June 2023
When it comes to remortgaging, we're seeing a number of clients considering a product transfer rather than a remortgage. People are worried about rising rates, securing a good deal and minimising fees and charges. New lenders might have stricter criteria and borrowing limits. It’s important to speak to a broker and get the best advice and a range of options so that you select the right remortgage deal or product transfer - you don’t want to take on a fixed rate deal that you regret later.
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, via video chat or in-person. 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 we've helped secure 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 propert - see our guide to mortgage valuations - 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. Find out more about when you need a solicitor for your remortgage application in our guide.
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. Find out how much you could save with our mortgage comparison calculator.
It Can Help You Avoid Moving Home
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. Or, you can use your mortgage for debt consolidation, though bear in mind this may cost you more in interest over time.
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. Try our mortgage overpayment calculator to see how repaying your mortgage early could shorten your mortgage term and save you money.
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. An alternative to consider may be a second charge mortgage.
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. You can typically remortgage up to 6 months in advance of your rate ending to secure a deal.
It Can Take Longer than a Product Transfer with a Further Advance
When you remortgage and switch to a new deal with a new lender, you have to go through conveyancing which is 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 conveyancing involved.
What Fees Are Involved When You Remortgage?
When you remortgage a property, there are sometimes fees including lender fees, conveyancing fees and valuation fees. Some lenders may offer conveyancing and valuations for free as part of your remortgage deal.
Average Remortgage Fees and Costs
|Lender's Product Fee||Valuation Fees||Legal Fees|
|£0 - £1,499*||£0 - £1,500*||£0 - £500 (Plus VAT)*|
The costs of a remortgage will depend on the amount you need to borrow, the type of mortgage, the interest rate you agree to pay, how long the term of the loan is and the fees you are charged when setting it up.
Find out how much you could save by switching to one of the best remortgage rates for your property with our mortgage calculator below. We also have mortgage calculators for home extensions and mortgage overpayments.
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John Charcol0330 057 5173£
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I would like to thank John Charcol especially Leigha and Reiss for their support with my recent mortgage application. The process was so smooth and stress free I couldn’t recommend them enough. This is the second time I have used this company and will continue to do so for every application.Posted
It was amazing experience Mr Shaahid was extremely proactive to get me mortgage.Posted
Excellent from start to finish. We were in a bit of a unique situation to get a mortgage and Maz (Mufazzal Choudry)has been brilliant at every step. Communication has been clear and helpful and we couldn’t recommend him highly enough.Posted
We had excellent service from Samm Walker when arranging our life insurance recently. Samm was very friendly, helpful and patient with us whilst going through the whole process. Highly recommended! Thank you!Posted
Excellent service from start to finish. From initial consultation, to getting the offer finalised, Mufazzal Choudhury was great at guiding us through the process and taking the lead on sorting everything out. Would highly recommend Mufazzal/Maz and John Charcol as a mortgage broker. Maz was open to questions at most times of the day fitting us in around our busy schedules. He's been continuously diligent, continuing to provide us revised offers and reduced rates as lenders lower their products.Posted
As a self-employed expat looking for a buy-to-let mortgage, I needed a broker who could track down a competitive deal for niche borrower, and Charcol brokers Mark Brazier and Hollie Yeates did it. As well as finding me the perfect mortgage, they offered brilliant support throughout the process, and everything went very smoothly their end.Posted
How Long Does Remortgaging Your Home Take?
Remortgaging takes 4 - 8 weeks on average. It can take slightly less or slightly more, depending on your circumstances and needs. Providing clear, accurate and relevant documents when required can help speed up the process.
In the event that rates go down during the application process, you can ask your broker about switching to one of the lender’s cheaper rates.
Why Should I Remortgage?
Remortgaging can help save you money on your mortgage. When you take out a mortgage you'll usually get a special introductory period. After this, your monthly payments can increase. Remortgaging is an opportunity to get a better deal and switch to a lower rate. It can also be a way to free up some of the equity in your home in case you want to use the funds for something like a wedding, a new vehicle purchase or a downpayment for another property.
Who Is Offering the Best Remortgage Rates?
There are many high street lenders as well as specialist lenders that only deal with brokers. The best deal for you will depend on your situation. To find the best rates for your circumstances, speak to a remortgage broker who will look at all the options available.
What Mortgages Are Available?
With John Charcol, you can find the latest rates from all types of mortgages available from lenders. Your adviser will help you decide whether to choose a repayment mortgage or an interest-only mortgage. They'll also help you figure out whether to opt for a fixed rate mortgage or a variable rate mortgage.
Do I Have to Get My House Valued if I Remortgage?
You’ll need to get your house valued if you’re changing lenders; this could be either a desktop valuation or a physical one. You won’t need a valuation if you’re doing a product transfer with your current lender.
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 or buy-to-let. 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.
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 debts – such as car, unsecured personal loans or 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 you could use to pay off 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 Find out which improvements add the most value to your home.
One major benefit of raising funds in this way is that your entire mortgage will be on the same introductory rate, 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 when remortgaging, although it will be much more straightforward than buying a new property since there won’t be an exchange of contracts or a change of ownership. Often, a lender will give you the option of using their chosen solicitor - which the lender will pay the basic costs for - or they'll offer you cashback if you choose to instruct your own chosen solicitor.
If you don't have a solicitor in mind John Charcol has a panel of solicitors we can refer you to.
Can I Remortgage Without a Broker?
It's possible to remortgage without going through a mortgage broker, but there are many benefits to using an experienced broker. A broker will be able to compare remortgage options for the best rates and deals, saving you time when looking to remortgage.
We’re also able to help you find competitive options, especially if you have poor credit, a non-standard property, or any other complex situation. Getting in touch with a broker can help you save a lot of stress and find you better options that can save you money.
Will Remortgaging Be Cheaper than Being Transferred onto My Lender’s SVR?
A lender’s SVR is often at least 2% higher than their other 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.
What Information Is Required to Remortgage?
Your lender will request several documents as part of your remortgage application. These might include:
- Bank statements from the last 3 months
- Payslips from the last 3 months
- Last 2 - 3 years of accounts/tax returns if you’re self-employed
- Your latest P60 tax form
- A passport or driving licence
- Proof of address - as shown in a utility or Council Tax bill
Remortgaging means to switch to a new deal with a different lender but stay in the same property. Learn about remortgage costs, valuations and see our advice.
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