Remortgage
Replacing an existing mortgage with a new one
Your Home may be Repossessed if you do not keep up repayments on your mortgage
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Remortgage (Part 1)
What is a remortgage and how does the process of remortgaging work in the UK?
A remortgage is essentially the process of refinancing. Once you’ve taken out a mortgage to purchase a property, you’ll typically have a scheme period of two, three or five years, either on a fixed or a variable rate.
When that rate comes to an end, you can remortgage – either staying with the same lender or moving to a different one. You’re trying to get the most economical option for your personal scenario.
We look to review this six months prior to the end of that scheme period, so we can get it all prepared. A lot of lenders provide offers for six months, so we can have it ready. We’ve got time to avoid any potential hiccups or challenges later on.
Also, if we secure a rate and they later improve, we can move you onto those better rates. If rates increase, we’ve already got you on a lower rate, which won’t change. We work with clients in that remortgage process to keep things at the most economical rate, essentially.
How long does it take to remortgage? How often can I remortgage my property?
It can be a pretty quick process with some of the high street lenders. We get an offer and then go through the legal work to change to the new lender. But we want to be looking at this roughly six months before your current deal ends, because not all lenders are as quick.
It’s good to have the option to go to a slower lender if they have the most appropriate deal for you. We’re not in a rush and we can get it done properly. But some lenders can be pretty speedy in getting it done – our quickest is 45 seconds.
You can remortgage as many times as you like – there’s no limit. Just make sure you’re not tied into a deal and getting stung with early repayment charges by doing it too early or too often.
What are the main reasons why people choose to remortgage? Can I remortgage to consolidate my debts?
The most obvious one is to refinance to avoid going onto a higher rate. You might be restructuring your finances – to increase or reduce your mortgage term, and increase or decrease your monthly payment.
You might be trying to pay off the mortgage quicker. Perhaps you have additional money coming in and you want to reduce the interest you’re paying. You might look to reduce your borrowing with a lump sum payment.
Something we’re seeing a lot at the moment is remortgaging with additional borrowing, raising funds on top of your normal mortgage. You could be paying off debts accumulated in that time. We would go through a process to make sure you’re not paying more interest or ultimately taking on more debt by doing this.
You could also look at raising funds for home improvements – a new kitchen, an extension or a loft conversion, for example. We see all sorts of quirky requirements, including school fees and business uses. Some people remortgage to pass a gifted deposit to their children. Quite regularly people raise funds and put the money aside ready to buy a new property.
Often people don’t know they can do this until they get the right advice. We would ask about your personal scenario – if you’ve had children, for example, or got married, you might want to raise funds for a honeymoon or the wedding or to support your children.
There are many different reasons you might want additional funds, but we do it in a sensible, structured manner. We assess whether it’s viable and then find the most suitable way to coordinate it all.
What factors should I consider when deciding whether to remortgage?
You’ve got to consider whether you’re tied in to your current deal or not, and when that’s coming to an end. You’d consider what rates that lender will put you onto if you don’t do anything. That should be contained within your offer, which they’ll let you know about in advance.
Do you want to have a look more holistically at your finances at that point? Do you have money to put into the property to bring down your borrowing? If you’re an investor, do you need to make improvements to that property? Is it a property you want to turn into a House in Multiple Occupation (HMO) or do you want to increase your portfolio and need to release funds?
There can be lots of things to think about. The main one is whether you’re tied in, what you want to happen, and how long you’ve got to get things sorted.
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What are the advantages and disadvantages of fixed rate versus variable rate remortgages?
A fixed rate stays exactly the same for the agreed duration of time. If you’ve got a two-year fixed rate, your rate stays fixed for two years. Variable rates come in different forms, but the most common are discount variable rates and tracker rates.
A discount variable rate typically follows a lender’s standard variable rate, at a certain percentage below. If the lender’s standard variable rate changes, your rate will change. A tracker rate follows a Bank of England base rate. If the Bank of England raises or drops the rate, your mortgage payment follows suit. That can have positives and negatives.
You can look at it holistically. If you’re on a tracker rate, does it make sense in the current market to take the riskier route, but with the chance of that going down? Or do you go for the stability of knowing it’s fixed?
The decision depends on the person and their situation. Some people might feel confident that the economy is changing and the base rate will reduce in the next few years. They might choose a tracker rate, as long as they’re aware of the risks and have the affordability to cover any increase. Other people might just want to know exactly what they are paying, with no risk of it going up or down.
What happens to my existing mortgage when I remortgage?
Effectively, you’ll be raising funds against your property with a new lender. That lender will send that money off to the solicitor, who passes it to your old lender. That debt is now cleared and they remove the legal charge on your property.
The new lender puts a charge on your property and the deal is done. Very rarely, it doesn’t quite go as smoothly as that, but for the vast majority of remortgages, it’s all done with a few clicks.
What happens if I don’t remortgage after my deal expires?
Once the scheme period ends, assuming you’ve got longer on your term, you’ll typically go on the standard variable rate. At the moment in September 2025, a lot of these are 8% or 9%, although some are slightly lower.
That’s quite a significant increase from most lenders’ fixed or variable rates. If your rate increases, naturally your monthly payment will increase – so not remortgaging will have a big impact on your personal bank account.
If you’re at the end of an interest-only mortgage term, and you haven’t repaid the debt, you need to get it refinanced or find a means to clear the balance.
Can I remortgage if I have bad credit?
It’s possible – it depends on how bad that credit is. It’s another reason to act earlier and talk to us. Often we see clients where it may be very tricky at this exact moment in time, but if we give it six months, certain things might fall off their record or they can get things sorted out and it will look a little more rosy.
We’ll either arrange something for you now, or explain why it’s not possible and guide you on the next steps.
Will I have to pay any fees or penalties when remortgaging?
Typically you’ll have fees from the lender as well as the interest. That might come in the form of an arrangement fee or a product fee. You’d also possibly have a survey cost or valuation fee. When you’re refinancing, you often only get those with certain lenders, for more complex property structures or for higher value properties.
Sometimes you have to pay for them to value your property. If you’re doing something more in-depth, such as a homebuyer’s survey or a full structural survey, you would expect to pay additional fees on top.
You’ll then have legal fees – as in any mortgage process, whether purchasing or refinancing, solicitors have to be involved, but some lenders cover the full cost. Others leave that down to you. You’ll always get the obligatory funds transfer fee, too, to pass funds from lender to lender or from other parties.
How can a mortgage broker help here? Is there anything else we need to know?
When it comes to remortgaging, the key is being able to assess your options early. Lenders are used to working with mortgage brokers and they will tell us the deals they’ll offer you to stay with them. A few years ago, it was quite hard to get that information.
Now, not only will they tell us, but they let us do that transaction as well. Six months before your current deal is ending, we’ll assess not only the rest of the market to see your options, but also what that lender will offer you to stay.
Without a mortgage broker, you’ve only got the second option – what they will offer you to stay. You don’t have the rest of the information to make a fully informed decision. Information is power, so we just give you the right detail to decide.
Refinance and remortgaging can be viewed in many different ways, but it’s an opportunity to look at your full scenario. You might not think you could do anything differently, but with appropriate advice, you might realise you can achieve something you thought was a pipe dream.
So be open and provide information to your advisor because we’re here to support you. The more information we have, the easier it is to get those appropriate solutions to get you what you really want.
YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME
NOT ALL BUY TO LET MORTGAGES ARE REGULATED BY THE FINANCIAL CONDUCT AUTHORITY
YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE
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