A remortgage is when you take out a new mortgage on a property you already own.
There are many reasons people remortgage, for example to reduce monthly payments or find a better deal or to help them pay off their mortgage sooner.
When you read about remortgaging, you may also come across the term product switching. It’s important not to get the two confused, and while remortgaging involves taking out a new mortgage with a brand-new provider, product switching occurs when you come to the end of your existing mortgage deal and you choose to take out a new deal with the same mortgage provider.
There are many reasons why you might decide to remortgage your home.
Homeowners sometimes remortgage to extend their mortgage term in order to reduce their monthly repayments. However extending the length of the mortgage term may potentially cost more money in the long term. Others choose to remortgage to release equity built up for other home-related spending, like home improvements.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Providing your financial circumstances haven't changed dramatically and you aren’t borrowing any extra money you should be eligible to remortgage your property. If you do want to borrow more on your mortgage, you will need to demonstrate that you can afford to pay back any additional borrowing. Your lender may charge a fee to make the change and you can find out if there will be a fee associated with remortgaging by asking your current provider. Usually, if you're placed onto your lender's SVR (Standard Variable Rate), you should be able to remortgage without any penalty.
Ideally, you should think about looking at your options three to six months before your current deal ends. However, if you're already on your lender's SVR you should begin looking straight away.
If you are currently on a preferential rate, such as a fixed or tracker rate, it is likely there will be an early repayment charge if you exit the product before the preferential rate ends.
If any of the following apply to you, remortgaging may not be the best option for you:
- You're tied into an existing deal
- Your financial position has worsened
- The value of your home has fallen.
If you have any concerns or questions, Mortgage Advice Bureau's advisers will be happy to help you decide whether a remortgage is right for you. Find a link to them at the bottom of this page.
The remortgaging process is fairly straightforward. All you'll need to do is:
- Speak to your lender or a mortgage adviser, like the experts at Mortgage Advice Bureau to see if remortgaging is right for your individual situation.
- If you decide remortgaging is the right step to take, your mortgage adviser will find the right remortgage product to suit your requirements and complete any required paperwork for you.
There is no set time, but typically, remortgaging takes between 4 to 8 weeks after you've applied. Get in touch with Mortgage Advice Bureau to find out how long the process will take for your home.
If you switch lenders or borrow extra money from your current lender, they will need to carry out a new valuation on your property.
Usually, a surveyor will visit your home for an inspection. Some lenders, however, will carry out a 'desk top' or 'drive by' valuation without entering the property.
You don't need to do anything; your new lender will arrange this for you. The surveyor will contact you to arrange a convenient date and time to carry out the valuation. A full report will be sent to you afterwards.
No, you can't. However, you can do a product switch with the same lender instead which will give you access to a new deal on your mortgage. You may also be able to raise additional funds with your existing lender.
At Mortgage Advice Bureau, mortgage advisers can give you advice on whether you’d be better off staying with your existing lender or switching by searching the mortgage market to help inform your decision.
There’s not a best time to review your mortgage, but if you’re worried about it, or simply think you could get a better deal, then it’s advisable to review your current mortgage deal. Mortgage Advice Bureau experts are happy to help with this, so you can discover if it’s a worthwhile option for you.
No, you don't have to remortgage in order to fund your extension project. You can apply with your existing lender for a further advance. A further advance is an additional separate mortgage account.
Fees will vary depending on your circumstances and the lender or product you've applied for. There are various legal fees associated with remortgaging, including early repayment charges and a deeds release fee, valuation fees, legal fees, lender application fees and broker fees. You may or may not need to pay all of these fees, depending on your situation.
A conveyancer and solicitor should carry out any other legal work for you, which may or may not be free depending on the lender you choose.
Yes, you do. However, some remortgages include a free legal package but this will mean they select the solicitor for you. If you're short on time, it may be faster to pay for your own solicitor. If you need to find a reliable solicitor, Mortgage Advice Bureau can help.
Some mortgaging products may have a fee, such as a mortgage booking fee, a valuation fee or the mortgage arrangement fee.
To find out more, please view our in-depth remortgaging costs guide.
If you switch from one mortgage to another during a tie-in period, you may face an early repayment charge. You'll be charged for breaking your deal early, and the lender uses this fee to recoup some of the interest it's losing.
If your home has increased in value since taking out your mortgage, you may be able to increase the amount you borrow. Mortgage Advice Bureau's experts can advise if this is the right step for you.
While a bad credit rating can make remortgaging more difficult, there are specialist lenders who may be able to help. There are even mortgages designed for people with poor credit ratings, Mortgage Advice Bureau will search through the options if you feel that remortgaging is right for you.
Mortgages can have lower rates than personal loans which means that some people may be tempted to add their existing debt to their mortgage to reduce their monthly payments, with the intention of using the money they've saved to pay off other debts. However, as your mortgage will normally be over a much longer term, you may end up paying back far more. This is something a mortgage adviser can help you with.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Remortgaging may help you get a better interest rate on your mortgage if you're currently on your lender's Standard Variable Rate. Usually, introductory deals and discounts only last on your mortgage for a limited period such as 2, 3 or 5 years and switching can help you secure a more competitive rate. However, there are other factors to take into account and you should always consider speaking to a professional mortgage adviser who can weigh up the advantages and disadvantages of your specific situation.
Mortgage Advice Bureau will search thousands of mortgages so you don't have to. Answer some mortgage related questions and an adviser will give you a call to discuss your options.
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