Your Guide to Remortgaging – What You Need to Know

What Is Remortgaging?

Remortgaging is when you take out a new mortgage on a property you already own, usually to replace your current mortgage deal with one that better suits your needs.

You’re not moving house or buying a new property. Instead, you’re simply switching your mortgage to a new deal, either with your existing lender or a different one.

People remortgage for different reasons, but the most common include:

• Getting a better interest rate to reduce monthly repayments
• Borrowing more money by releasing some of the equity in their home
• Changing the structure of their mortgage, such as switching from a variable to a fixed rate or adjusting the loan term

In short, remortgaging gives you the chance to reassess your mortgage and make it work better for your current circumstances.

Why Remortgage?

The most common reason is to save money. Many fixed-term deals last two to five years, after which you may be moved onto your lender’s Standard Variable Rate (SVR)—which is typically higher. By switching to a new deal, you could secure a lower interest rate and reduce your monthly repayments.

An example of remortgaging

If you currently owe £175,000 on a mortgage with a 5% interest rate, moving to a 3% rate could save you around £180 per month, or £2,160 per year.

Other reasons include:

• Accessing funds for home improvements or major life events
• Using equity to fund a deposit on a second property
• Consolidating high-interest debts into a single, lower-rate repayment

Releasing Equity – How It Works

If your home has increased in value, or you’ve paid off a significant portion of your mortgage, you may be able to borrow more against it. This is known as releasing equity.

An Example

Your home is worth £300,000 and your outstanding mortgage is £200,000. You remortgage for £225,000 and release £25,000 in equity. This money could be used for anything from an extension to consolidating debt—though it increases your total borrowing and monthly repayments.

Lenders will look at factors such as:

• Your income
• Your credit score
• Your mortgage repayment history
• The current value of your property
• Your remaining mortgage balance

Most lenders will allow borrowing up to 80–90% of your property’s value, depending on your circumstances.

When’s the Right Time to Remortgage?

Typically, the best time to remortgage is shortly before your current deal ends. If you’re on a fixed-rate mortgage, you can usually begin the process about six months before your term ends without incurring early repayment charges. That gives you time to secure a new deal and avoid slipping onto your lender’s SVR.

You might also consider remortgaging earlier if:

• Interest rates have fallen significantly
• Your property has risen in value
• You need to release equity

But timing is important. If you exit your current deal too soon, you could face charges that outweigh any savings.

How Does the Remortgaging Process Work?

Remortgaging is usually simpler than taking out your first mortgage. Here’s how the process typically works:

1. Review your current mortgage
   Check for any exit fees or early repayment charges. Some deals carry penalties for leaving early, which could affect your decision.
2. Consider your goals
   Do you want to lower your monthly payments, fix your rate, borrow more—or a combination of the above? Knowing what you need will help you choose the right product.
3. Check your credit score and finances
   Lenders will assess your financial situation. Make sure your credit history is accurate and up to date, and have proof of income ready.
4. Get an Agreement in Principle (AiP)
   This gives you an idea of how much a lender might let you borrow, without a full credit check. It’s not a guarantee, but it’s a useful starting point.
5. Apply for your new mortgage
   Once you’ve found a deal, you’ll need to complete a full application, supply documents, and agree to a valuation of your property.
6. Complete the remortgage
   Your solicitor or conveyancer will handle the legal transfer. Some lenders include legal fees in the remortgage package, so check what’s covered.

The process usually takes between 4 and 8 weeks from start to finish.

Is Remortgaging Right for Everyone?

Remortgaging can be financially beneficial—but it’s not always the right move. You should be cautious if:

• You’re still within a fixed-term deal and face large early repayment charges
• Your credit score has dropped or your income has changed significantly
• You only need to borrow a small amount—personal loans or 0% credit cards may be cheaper alternatives
• You’re consolidating debt—spreading repayments over the full mortgage term can cost more in the long run

Your home is also used as security, so if you can’t meet the higher repayments, it could be at risk of repossession.

Need to rethink your mortgage options?

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