How does remortgaging work?

A remortgage is when you apply for a new mortgage with a different lender, but stay in your current home. It’s not the same as some people’s remortgage definition of borrowing more money from their current lender.

It’s definitely worth checking the latest offers if your current mortgage deal is about to end, or has already moved to a follow-on rate. For example, if your property is worth more than when you bought it, your loan-to-value ratio may have changed – and this could mean you have access to a wider range of deals.

Remortgaging could also help you raise money for home improvements or a special purchase, but think carefully about whether you can afford the extra amount over the full mortgage term. And if you’re planning to consolidate other debts, don’t forget that independent financial advice is available. Your home could be at risk if you can’t make the payments.

Big changes in your life, planned or unexpected, could mean that your current mortgage no longer suits your needs. Whether you’re starting a family or expecting a significant change to your income, remortgaging gives you a chance to find a deal with us that’s a better fit for you now and in the future. 

The remortgaging process typically takes from 4 to 8 weeks after you apply. For most applications, you’ll need to speak to one of the lender’s mortgage advisers, who are qualified to advise you about the best deal for your needs. Before you get to this stage, think about the following 5 questions to help you get a clear idea of your situation and needs before applying.

1. What will it cost to leave your current mortgage?

Some mortgages include charges when you leave under certain circumstances, such as an exit fee or early repayment charge. This could be thousands of pounds if your current mortgage deal hasn’t ended, so check the documents you received from your current lender or contact them for details.

2. What do you want from a new mortgage?

Do you want to lower your monthly payments or have the flexibility to pay off your mortgage sooner? Is a fixed rate right for you, so your payments won’t change for a set period? Think about what you need now and how your needs might change in the future.

3. Is your credit score in good shape?

When you apply to move your mortgage, the new lender will check your credit score with credit reference agencies. Before you apply, make sure the details on your credit score are correct, as even a spelling mistake in your address history could cause a problem.

4. How much can you borrow?

Try our mortgage calculator to see how much you could borrow and what your monthly payments may be. You should also think about how a change in interest rates could affect your finances – our interest rate calculator shows how rate changes would affect your payments.

5. Which remortgage deals are available?

Once you know what you want and how much you can borrow for it, you can start comparing mortgage deals.

It’s important to think about your wider financial situation when considering how to remortgage your home. Understanding what happens when you remortgage is also key, so here are the steps you’ll need to take.

1. Complete an Agreement in Principle

Most lenders now let you get an online Agreement in Principle (AiP). It’s a way to find out if a lender is willing to lend the amount you need, without a full credit check. You don’t need to choose a specific remortgage deal and it’s not a guarantee you’ll be approved for a remortgage – but it will help you understand your options.

2. Consider all the costs

To make sure remortgaging leaves you better off, check whether the lender you plan to move your mortgage to charges any of the following

• Application fee – a charge to set up your new mortgage. Also known as an arrangement, product or booking fee
• Valuation fee – to confirm the value of your property
• Solicitor’s fee – a solicitor will need to manage the transfer of your mortgage

Ask any prospective lenders if you’d need to pay an exit fee or early repayment fee if you want to remortgage again in the future.

3. Apply for your new mortgage

Once you have an AiP, you can apply for your remortgage. You’ll need to provide information about your personal and financial circumstances, as well as details of your current mortgage. Make sure you have documents to prove what you earn and the paperwork for any loans or other credit commitments.

4. Completing your remortgage

The final steps of a remortgage are pretty much the same as a buying a new property. Your new lender will carry out a credit check to confirm your current circumstances and arrange for your property to be valued. You’ll need a solicitor or conveyancer to handle the transfer of your mortgage. Some lenders may offer this as a free service.