Remortgaging is the process of switching your existing mortgage to a new deal, either with your current lender or a different one. It is one of the most effective ways UK homeowners can reduce their monthly payments, access better rates, or release equity from their property. Despite this, many homeowners remain on their lender's standard variable rate long after their initial deal expires, paying hundreds of pounds more each month than they need to.
What Exactly Is Remortgaging?
When you remortgage, you replace your current mortgage with a new one. The new mortgage pays off the old one, and you begin making payments under the new terms. You can remortgage to a different lender for a better rate, stay with your existing lender on a new product (sometimes called a product transfer), or borrow additional funds against your property's equity.
Remortgaging does not mean moving house. Your property remains the same, but the financial product secured against it changes. It is a routine part of homeownership in the UK, with millions of people remortgaging every year when their fixed-rate or tracker deals come to an end.
When Should You Consider Remortgaging?
Your fixed-rate deal is ending: Most UK mortgages start with a fixed-rate period of two, three, or five years. When this period ends, you typically move onto your lender's standard variable rate (SVR), which is almost always significantly higher. Remortgaging before or shortly after your fixed rate expires can save you a substantial amount each month.
Interest rates have dropped: If the Bank of England base rate has fallen since you took out your mortgage, or if competition among lenders has driven rates down, you may be able to secure a lower rate by switching. Even a small reduction in your interest rate can save thousands of pounds over the term of a mortgage.
Your home has increased in value: If your property has risen in value, your loan-to-value (LTV) ratio will have improved. A lower LTV unlocks access to better mortgage rates. For example, moving from 85% LTV to 75% LTV can make a meaningful difference to the rates available to you.
You want to release equity: If you need funds for home improvements, to repay a Help to Buy equity loan, or for another significant expense, remortgaging to a higher amount can release cash from the equity you have built up. This is often cheaper than taking out a personal loan, though it does mean borrowing more against your home.
The Remortgaging Process
The typical remortgaging process follows several key steps. First, check your current mortgage terms, including any early repayment charges (ERCs) that may apply. Next, research the market or speak to a mortgage broker to find the best available deals. Once you have chosen a product, you submit a mortgage application with the new lender.
The new lender will carry out affordability checks and arrange a valuation of your property. If everything is approved, a solicitor or conveyancer handles the legal work to transfer the mortgage. On completion day, the new lender pays off your old mortgage and the new terms begin.
From start to finish, remortgaging typically takes four to eight weeks, though it can be quicker if you are doing a product transfer with your existing lender. Start the process around three to six months before your current deal expires to ensure a seamless transition.
Costs to Consider
While remortgaging can save you money overall, there are upfront costs to factor in. Early repayment charges on your current mortgage can be significant, sometimes amounting to several thousand pounds. The new lender may charge an arrangement fee, typically ranging from £0 to £2,000. You will also need to budget for legal fees, although many remortgage deals include free legal work and valuation as an incentive.
Always calculate the total cost of switching against the savings you expect to make. A mortgage broker can help you run these numbers and determine whether remortgaging makes financial sense in your specific situation. In many cases, the savings far outweigh the fees, particularly if you are moving off an expensive SVR.
Releasing Equity Through Remortgaging
Releasing equity means borrowing more than your current mortgage balance, with the difference paid to you as cash. For Help to Buy homeowners, this is one of the primary routes to repaying the government equity loan. For example, if your home is worth £300,000 and your mortgage balance is £180,000, you could potentially remortgage to £240,000 and use the £60,000 difference to clear your equity loan.
Lenders will assess whether you can afford the higher repayments, and the amount you can release depends on the maximum LTV they will offer. Most lenders cap standard remortgages at 85% to 90% LTV. Speaking to a broker who understands both remortgaging and Help to Buy is strongly recommended to navigate this process smoothly.