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A remortgage is a mortgage situation whereby you decide to change your existing mortgage to a different type (either with the same lender or with a new lender) or you simply want to renegotiate the terms of your mortgage. Usually the main purpose of a remortgage is simply to find the best mortgage for your situation at the time and get the most cost effective package available. If your property has significantly gained in value, you might want to remortgage to release the capital to pay for something new such as an extension or simply a holiday.

As mentioned you will almost certainly want to remortgage your property to secure a better deal than you have with your existing lender particularly if you are on their standard variable rate or soon will be. People can save thousands of £'s by making sure they are on the best deal for them.

You might want to simply change the type of mortgage you have, for instance if you fear interest rates are going to rise then a fixed rate would protect you from that. Or you might be unhappy with your existing mortgage lender due to a dispute and want to remortgage to a different lender.

Remortgaging is also a way to raise cash. At any point in your life journey, a situation may arise where you need access to some money and you may be lucky enough to have equity locked up in your home. You might want to financially help your family members, make another investment or pay medical bills - there are numerous scenarios.

If you own your house outright, you can remortgage to release some or all of the cash in your property. How much you can borrow will depend on your income and your outgoings. Lenders will also need to understand what the money will be used for. You can get a rough idea of how much you might be able to borrow using our calculator.

Becoming a landlord can be a good prospect if you feel property prices are likely to rise or want to benefit from a rental income. Buy to let mortgages can be more difficult to get, usually have higher interest rates than residential mortgages and often require large deposits. So an alternative option is to remortgage your residential property so that you can buy your second house outright or reduce the amount of mortgage you need from a buy to let lender. You can read our full guide to buy to let to understand this further.

Alternatively if you are thinking of remortgaging your current home with the intention of converting it into a rental property and moving to a new residence, then this is called a let to buy. We suggest you read our guide to let to buy to fully understand the mechanics of this as it can be a complicated process without help.

If this is something you are considering then seek expert advice from one of our mortgage brokers to determine whether this could be an option for you.

Yes definitely and this is one of the most common reasons for remortgaging. If you already have a mortgage, sometimes your changing lifestyle and requirements mean that your mortgage no longer suits your needs. You might be seeking a better interest rate to lower your monthly payments, you might seek to fix your rates against future increases in a turbulent market or you might be looking to change your mortgage term.

Although you could remortgage at any time, you should do it when there will be a positive advantage to do so. The most common scenario is that your existing mortgage product is coming to an end. Standard variable rates are rarely the cheapest offers so it usually makes sense to shop around. As the mortgage process can take some time to complete it is best to begin your search around 3 months before you do fall onto your lender's standard variable rate. You can reserve some deals up to 6 months in advance if you are really eager!

Although remortgaging can have many benefits, sometimes it isn’t advised to do so.

Some scenarios include:

  • If you are already on a good deal, it might not be worth moving. Speak to one of our advisers for expert advice about whether remortgaging might benefit you.

  • When your mortgage debt is small it may not be worth switching lender because you are less likely to make a saving if the remortgage fees are high. It might be better for you to stay on your current rate and avoid any further fees.

  • If you have a high early repayment charge you might not gain from switching. Do your sums carefully

  • If your circumstances change and you are in a different financial position than when you entered into your mortgage agreement, remortgaging might not be a good idea or may not even be possible. For example, if you stop work and become self employed you might struggle to prove your earnings.

  • If your circumstances change and you are in a different financial position than when you entered into your mortgage agreement, remortgaging might not be a good idea or may not even be possible. For example, if you stop work and become self employed you might struggle to prove your earnings.

Ok so you know the time is right to remortgage and grab a better deal! But 'how do I remortgage?', the next part of our remortgage guide will walk you through the various steps.

The first thing you need to do once you've decided that you're going to remortgage, and are ready to start the mortgage process, is work out how much you are likely to be able to afford to borrow this time around. Remember, it is not just your financial situation that may have changed, lending policies and regulation may well have done too. So it is not a given that you can borrow the same amount as you did when you took your last mortgage deal. You can use our borrowing calculator to get a rough idea but for an exact answer you will need to speak with one of our advisers.

  • Collate your paperwork

    A mortgage lender will require you to submit an extensive list of documents with your remortgage application to prove everything you have told them is accurate. Click here to read our 'what do you need to get a mortgage?' guide which outlines the paperwork and documents you will need.

  • Speak to a mortgage adviser and choose a mortgage product

    You can of course go directly to a mortgage lender but using a mortgage broker such as ourselves widens your access to a much larger range of options. We will assess your individual circumstances, check through affordability and recommend the most suitable mortgage for you. Our advisers will then be on hand to manage the remortgage application process from end to end and be the point of contact between you and the chosen lender. The best part is that our service is totally free.

  • Make a formal remortgage application

    After you have agreed on the best remortgage deal for you then you need to make your application to the lender. This involves giving the lender various personal and financial details, credit scoring and submitting your financial paperwork for review. It is at this stage that you may be required to pay some fees to your chosen mortgage provider depending on the details of the individual mortgage product. Fortunately with a remortgage it is quite common to be offered a free basic mortgage valuation and a free basic legal work package.

In very much the same way as an application to purchase a property, the lender will assign an underwriter to your application who will take some time to consider your remortgage application. Your employment history, credit history, the property you are remortgaging and the amount you want to borrow will all be reviewed again. The underwriter will also verify the documentation you provided in your application. They may ask for additional information or documentation to be supplied if anything is not clear or requires further clarification.

When remortgaging the property survey process can be a little different. If you have a lot of equity and overall the application does not seem to risky then the lender may not send a surveyor to your home. Instead they may conduct a 'drive by' valuation, where they simply have a look from the street, or a 'desktop valuation', where they estimate the value using some computer software. Of course they may still send someone in person but either way, it is common for this to be free of charge.

If the lender is happy with the contents of your remortgage application and the property valuation was agreed to be high enough then you will receive a formal mortgage offer in writing. If the valuation has come back lower than expected then you may be able to choose another mortgage rate with the lender that fits in with their assessed level of equity.

The mortgage offer represents the end of the mortgage application process as it is a binding and formal agreement from the lender to offer you the necessary funds. This offer will usually be valid for between 3-6 months so as mentioned earlier in the guide, it is possible to reserve a rate in advance.

In some cases the remortgage process can be completed in just a matter of days. However, on average it typically takes between 2-6 weeks to see the process out from start to finish depending on the complexity of your application and whether additional information is requested by the underwriter.

Some lenders are considerably faster than others and average processing times change day to day depending on various factors. If timescales are a concern then it is even more important to seek help as our advisers will have up to date knowledge or which lenders to recommend for a speedy turn around.

With the mortgage offer in hand, your conveyancer will be able to prepare for completion. Funds will be taken from the new lender and sent to your old lender to repay the previous loan.

It can pay to be vigilant and to consider other mortgage options on a regular basis. Remortgaging is common practice nowadays much like shopping around for new energy or utility providers. You can definitely benefit from shopping around to see if you can get a better deal.

Run a search now on our mortgage comparison tool to see which remortgage products are currently available and then speak to one of our expert advisers.

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