Remortgages

  • Increase borrowing
  • Get a better rate
  • Consolidate debts
  • House improvements
  • Buy second home
  • 90% LTV available
Mortgages

What is a Remortgage?

A remortgage is when you switch from the mortgage you currently have for your property to a new one – either with your existing lender or a new lender. Either way, it is an opportunity to find better rates and better mortgage terms.

Remortgaging is an important financial decision. Once you have decided what to do it can take a number of weeks to implement because of the various detailed steps involved. But it need not be onerous if you use a mortgage broker who has access to the whole market and provides great advice and service.

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  • Access the whole market
  • Compare 100s of deals
  • Rates start at 3.2% APRC (Rep. 4.1% APRC)
  • Up to 90% LTV
  • All credit ratings welcome
  • No upfront fees

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When Should I Remortgage?

There are natural moments when you should or will need to remortgage, in particular, if your current mortgage deal is coming to an end.

These are the probable triggers for you wanting to remortgage:

  • Your current deal is coming to an end and you will be automatically switched to your lender’s standard variable rate (SVR). The SVR is typically very much higher than you will be used to paying.
  • You want to switch to a lower rate deal. This is likely to be a fixed rate deal (90% of people who remortgage for a better rate opt for a fixed rate).
  • You want to release equity from your home – i.e. you’re able to borrow more because your property’s value has grown. This is sometimes called capital raising. You may use this extra capital for anything, but reasons might include debt consolidation, home improvements, or some other project or larger purchase.
  • You want to start being able to make overpayments – your financial circumstances may have become more favourable or maybe you expect them to. A mortgage deal that allows you to overpay will mean you can shorten the repayment period and reduce your total interest costs. The financial benefits of being able to do this can be significant.
  • You want to benefit from a lower LTV – a lower LTV can mean lower rates of interest. You’ll have been reducing your mortgage balance and hopefully your property’s value has been rising too. In which case your LTV will have reduced. This means you may be able to get a better deal if you remortgage now.

When you might not want to Remortgage

If you want to remortgage while your current deal is still very much alive it may be hard to financially justify remortgaging even if there are better deals to be had. There are two key reasons for this:

  • Your current mortgage deal may come with significant exit (fee) penalties.
  • The various fees associated with a new mortgage could also be a deterrence.

Consider a Secured Loan

If want to benefit from the growth in your home’s equity but cannot justify remortgaging to do this then consider a secured loan. A secured loan is simply a second-charge mortgage. This route means you can avoid disturbing your mortgage and still borrow against the growth in home’s value. In addition, a secured loan can be faster to arrange than a new mortgage.

 

Useful Remortgage Articles

How to Remortgage

This is likely to be the path you take to getting a better mortgage deal:

  • Use a “whole market” broker to help you find the right deal – don’t simply stick with your current lender, and don’t use a broker who can only explore a part of the market. There are over 1000 mortgage deals out there and you need to be able to choose from them all. A whole market broker, like Solution Loans and its partner, has the tools to help you do this very quickly.
  • When choosing which deal make sure you take into account:
    • interest rates, any discount period & all fees
    • whether you want a fixed or variable rate, and if fixed then for how long
    • whether a mortgage allows you to make overpayments in the future
    • the additional borrowing you might want – don’t borrow more than you really need
  • Make the choice and apply for your specific mortgage
  • Receive your mortgage offer
  • Wait for your conveyancing solicitor to tell you you’ve completed.

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Our Money & Credit Guides

If you’re uncertain which type of credit might suit you or you have a money problem then one of guides may help you. We summarise each type of loan and their pros and cons, and address issues regarding debt and credit ratings.

Remortgage FAQs

Remortgages: things to know before you apply

How long does it take to remortgage?

When planning the moment to remortgage keep in mind that the process can take four to eight weeks. This is simply because the process involves property valuations, credit checks, legal paperwork, etc.

Do I have to stay with my existing lender if I want to remortgage?

No. Unless your existing lender offers you a great deal, and sometimes they do reserve good deals for current borrowers, you should explore the whole mortgage market. You can take out a mortgage with a different lender and pay off the existing one.

Should I use a mortgage broker?

Yes, but not all mortgage brokers are the same. You should never have to pay any fees upfront. Good brokers are paid by the lenders and not by you. You should also only use a broker that covers all lenders and not just a portion of them.

Can I apply for a new motgage before my old deal lapses?

Yes. It certainly makes sense to start doing your research and working with a broker before your current mortgage deal comes to an end. And some mortgage lenders will make you an offer in principle than can last for several months.

Can I increase my borrowing when I remortgage?

Yes, and around 50% of remortgage deals done in the UK do raise more capital. People do this because they have paid off some capital already and because the value of their properties have risen. You may be able to as well.

Is my property valued when I remortgage?

Yes. It may be a considerable time since you took out your current mortgage. Typically house prices rise in the medium to long term. Lenders need to decide if they will lend the amount you need and one of the deciding factors is your property’s value.

What fees are charged when I remortgage?

The following fees may apply when you remortgage:

  • Booking fee
  • Valuation fee
  • Arrangement fee
  • Hight lending charge
  • CHAPS fee

Read more about mortgage fees.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT. THE ACTUAL RATE AND FEES CHARGED WILL DEPEND ON YOUR CIRCUMSTANCES. ASK FOR A PERSONALISED ILLUSTRATION.

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Written/Reviewed by: Amanda Gillam