Remortgaging Advice

To put it simply, remortgaging is paying off an existing mortgage on a property by acquiring a new one. Remortgaging can improve buyers’ situations financially by raising capital for example. Furthermore, paying off a mortgage early can make new mortgage payments smaller.

We can help get you the right remortgage deal.

When looking to remortgage you will need to remember that you may have to pay an early repayment charge to your existing lender. If you’re looking to remortgage, contact us today.

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Author: Carl Shave - CEO and co-founder
Last updated: 26 May 2024

How do I remortgage?

Many of the stages of the remortgaging process are similar to that of getting a standard mortgage, and in other ways the process is even simplified.

You’ll initially need to get your property valued. Then you can engage a solicitor who will handle the transfer of deeds from one lender to another. However, it’s not unusual for lenders to offer to arrange these as part of their service. This is often as part of a “fee-free” remortgage offer.

Upon submitting your new mortgage application, it will be subject to the same checks as any other mortgage. This will include an assessment of your affordability and a credit check.

After you receive your mortgage offer, the new lender will repay your existing mortgage and your new mortgage will commence. The time the remortgage process takes can vary from lender to lender, but it generally takes four to eight weeks.

An introduction to Remortgaging

Remortgage topics

Useful Information

What are the costs of remortgaging?

Remortgaging can cost very little from the outset. It’s quite common for lenders to offer Free Mortgage Valuations and Legal Packages to carry out the conveyancing.

That said some lenders may not offer any benefit and you will need to pay for the mortgage valuation and legal costs. This is on top of any mortgage lender’s arrangement and mortgage broker fees that may become payable.

Other costs to look out for are any early repayment charges and any nominal fees. These may be incurred for closing down your current mortgage term early.

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When can I remortgage?

Strictly speaking, you can remortgage from one lender to another at any time. However, there can be factors which can make it financially unwise to do so. One of the main barriers can be Early Repayment Charges (ERC) on your existing mortgage deal.

Many mortgage products offered in the past few years have effectively had “tie-in” periods. Usually, the tie-in is just for the duration of the mortgage deal, although other products may have a tie-in period that extends beyond the actual product term. In either case, repaying your mortgage within the period will result in an ERC.

ERCs can amount to thousands of pounds, as they are often calculated as a percentage of the mortgage balance. When considering a remortgage, ERCs and other fees must be considered.

The fundamental question is: will the amount you will save in interest by transferring to a new mortgage outweigh the amount you will have to pay in early repayment charges and other fees associated?

Is there an ideal time to remortgage? Yes, it’s when your introductory deal comes to an end, although some lenders may offer to transfer you onto a new deal to try to keep your business. If they do not then there is a danger that your mortgage will revert to the lender’s Standard Variable Rate (SVR).

SVRs tend to be quite a bit higher than other products on the mortgage market. Therefore, you could experience a sharp hike in both interest rate and your monthly payments.

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What types of properties can I remortgage?

Yes, you can remortgage a shared ownership property in the same way as a conventional mortgage, with the only difference being that shared ownership mortgages are only available via selected lenders.

Remortgaging a Buy-to-Let property works in the same way as when you purchase a property using a Buy-to-Let mortgage. Lenders will assess the current monthly rent that can be achieved, as well as your personal circumstances, property value and available property equity.

Our mortgage advisers can evaluate everything for you, providing a clear indication of whether you can reduce your monthly payments.

An interest-only mortgage can be remortgaged onto a new deal. However, you must be able to adhere to some strict criteria. This is because these types of mortgages are deemed as higher risk lending by the regulator.

Typically, lenders will consider an interest-only remortgage for those who:

  • Have good levels of income.
  • Loan to values of 75% or less.
  • Have a significant amount of equity.
  • Meet minimum property values above certain parameters.

To check if you qualify for an interest-only remortgage, get in touch today.

How to get the right mortgage deals

Getting yourself the most favourable deal could end up saving you thousands over the duration of the loan. So, it’s understandable you’ll want to make sure the deal you get will work well for you in the long term.

Getting the best deal can mean different things according to your situation, although there are a few basic tips to follow which can help you get access to the most advantageous deals:

It’s worth taking time to research what the various mainstream lenders are able to offer for a remortgage, but also check what your current lender might be able to provide. This way, you’ll get a good idea of a benchmark figure for the rates available.

Don’t forget to factor in possible early repayment costs on your current mortgage. You’ll also need to remember that there are specialist lenders who only deal through intermediaries or brokers.

Take a look at your own credit rating before you start applying for the most competitive deals.

You’ll also be able to spot any bad credit issues on your records, and then you can take all possible measures to remedy the situation.

Having a large deposit, or a sizable amount of property equity, will always help you to access the most favourable deals. The added security to the lender will mean you are less of a perceived risk.

Getting the best remortgage tracker rates

Tracker rates are typically a little higher than fixed rates. But you can take advantage of any fluctuations in the prevailing rate that the product is pegged against. This may be the Bank of England base rate or the LIBOR rate.

A drop in the rate could potentially represent a saving of hundreds, if not thousands of pounds over the life of the mortgage. Obviously, the reverse is also true if the prevailing rate increases.

In the highly competitive and diverse market, the most attractive deals can appear and disappear overnight. It takes a thorough knowledge of the industry, strong lender relationships, and a finger on the pulse when it comes to the direction of trends to know who to approach and what the best deals will be.

The best remortgage tracker rates are not always available on the open market. This is because some lenders will only offer their best remortgage rates via mortgage brokers. Get in touch today to start your remortgage journey and we will pair you with one of our expert advisers.

What are the best remortgage fixed rates?

Finding the best fixed rates deals will take research and involve looking into products offered by specialist lenders.

The best remortgage rate for you can also depend on what other aspects of the mortgage deal will be important for you. You might only be able to get an attractive interest rate for a relatively short period. After this your rate will revert to the BOE base rate.

This might work in your favour if you only need the mortgage to run for a shorter period, but it could cost you money if your term runs over many years.

It’s also worth looking at other fees around the remortgage offer, especially if it comes with an attractive rate of interest. You might find that any savings are offset by a higher arrangement fee, or that you will incur a costly fee if you choose to repay the mortgage early.

All in all, it pays to look closely at the details of a deal, especially if it has a low fixed rate of interest. You can then make accurate calculations to determine if it will work for you. Additionally, you can decide if the ‘best’ fixed rate might be a fractionally higher one based on other factors.

Can I get a fee-free remortgage?

Yes, there are plenty of products that are completely fee-free. These products will typically have the mortgage valuation and legal package included, as well as no arrangement fee.

Some products will also offer a small amount of cashback to offset any closing down fees you may incur with your current lender. You can determine if it will be suitable for you. Additionally, you can assess if the ‘best’ fixed rate might be slightly higher due to other factors with the mortgage.

Our expert remortgage brokers can ensure that you are paired with the best remortgage deal, based on your circumstances.

Who are the best remortgage lenders?

Finding the best lender comes down to who is offering the most appropriate scheme that meets your needs. There are numerous lenders available and new challenger banks entering the market, with each having their own individual criteria to assess who they are happy to lend to.

With this in mind, the best remortgage lender for you may not be the same as the next borrower. The word ‘best’ although widely used, can be misleading in this context. In our opinion, the most important factor is actually finding the most appropriate scheme for your individual situation. Get in touch today and we can help you do so.

What is a product transfer?

It’s a technical term used to describe the process of changing the rate with your current mortgage provider. This is usually done upon or nearing the expiry of your current deal.

The main benefit from doing so is that you’re making a like for like change, so you will not be borrowing any additional funds or require additional underwriting thereby keeping the process relatively simple.

However, remaining with your current lender may not be right for you if they are not offering you the best value product. Speaking to a mortgage broker can help you assess all options and get the right deal.

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Remortgaging FAQs

Most lenders will permit a remortgage to 85% value and some will lend up to 90%, although as at the time of writing, there are a select few that will consider up to 95% loan-to-value.

Lenders will still consider your affordability and if the remortgage involves raising capital. For example, if any is being used for debt consolidation. This may reduce the overall loan to value a lender will permit. Different limits will also apply if the property is a Buy-to-Let.

A remortgage can be completed in a matter of a few weeks. If all is very straightforward a typical time frame is around 6-8 weeks.

Although, there are no guarantees, it is always advisable to give yourself plenty of time and apply in advance. Bear in mind that the new lender may not let you apply until a minimum period prior to completion. This may be no more than 6 months.

Yes, a solicitor or conveyancer will be required. Although much of the legal work would have been carried out when you purchased the property.

Any new lender will need to check all the legalities are correct before offering you a new product. And as stated previously if any legal work is required many lenders offer this as part of their service.

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