Skip to main content
Call us today: 0345 450 4660

Everything You Need to Know about Remortgaging

Do you feel like you’re paying too much for your mortgage? If so, remortgaging to a different mortgage could save you cash, potentially adding up to thousands of pounds of savings over the lifetime of your repayment period.

Even if you’re happy with your current deal, it might still be worth checking out what else is available. This guide is for anyone who wants to know the key details about remortgaging.


What is remortgaging?

Remortgaging is when a homeowner takes out a new mortgage to pay off their existing mortgage. You may want to view remortgaging as switching from one mortgage to another. Remortgaging can be completed with the same lender or with a different lender.

Why should I remortgage?

There are different reasons to remortgage but the most common one is to take advantage of a better mortgage deal with a lower interest rate. Over years of mortgage repayments, the homeowner may have improved their finances and credit score, enabling them to access a mortgage with lower interest.

Some people choose to remortgage after using a fixed-rate mortgage. This is a mortgage that has a fixed interest rate for so many years before it automatically changes to another mortgage type with a variable interest rate. Those that prefer to know exactly how much their monthly payments will be could decide to remortgage to another fixed-rate mortgage after their first mortgage’s fixed-rate period ends.

Remortgaging is also a method of releasing equity. If you have built up equity in your home through years of repayments and/or increases in property value, you may be able to remortgage to leverage some of your equity. This is when you ask the new mortgage provider to loan you an amount to pay off your existing mortgage, and some additional funds based on your home equity. The additional money can then be used for a host of reasons, including home renovations, debt consolidation or a big-ticket purchase.

Is remortgaging right for me?

The only way to know if remortgaging could save you money or enable home equity release is by comparing what you currently pay to what mortgage deals are available now. This will be subject to the market and personal circumstances. It is advised to seek professional mortgage advice for help assessing your remortgaging options.

How much could I save by remortgaging?

Remortgaging could save you a small amount each month on interest payments. However, as mortgages are typically taken out with long-term repayment periods, these savings can soon add up. The latest research has found that some homeowners could save up to £5,000 by remortgaging at the right time.

How do I remortgage my home?

Remortgaging your home should be a step-by-step process. First, you should read the terms and conditions of your current mortgage to be aware of early repayment fees and other costs. You should then engage with a mortgage advisor to help you identify suitable mortgage types before searching the market. Once you have found a mortgage deal that matches your needs and preferences, you should get ready to apply and then lodge your application.   

When is the best time to remortgage?

It’s a good time to remortgage when you believe you can find a better deal. There may be many reasons why you believe an improved deal is possible, not limited to paying off debts, improving your credit score and improving personal finances.

However, one of the most common times homeowners choose to remortgage is when an initial period is coming to an end within their current mortgage. Discount, fixed-rate, and other mortgage types provide more appealing interest rates or peace of mind in the first few years, and then their terms change.

If this sounds familiar, it is best to start looking for a remortgaging deal a couple of months before your initial period ends.

How long does it take to remortgage?

After applying for a new mortgage, it can take between one and two months for the old mortgage to be paid off and the new mortgage to be in place. This is the average timeframe that could be extended if there are unique circumstances or delays due to market demand.

This period does not include the time it takes to research your options, which can be sped up with professional remortgaging guidance.

The remortgaging deals

Remortgaging can be done by switching to the same type of mortgage you currently have with better repayment terms or switching to a different type of mortgage completely. The most common types of mortgages people switch to include:

  1. Repayment mortgages
  2. Fixed-rate mortgages
  3. Standard variable rate mortgages
  4. Tracker mortgages
  5. Interest-only mortgages

How much does remortgaging cost?

You should be aware of all the costs associated with remortgaging before agreeing to a new mortgage. If saving money through remortgaging is the primary aim, fully understanding the costs are essential.

Your existing mortgage may include an early repayment fee for paying off the mortgage early. This will depend on the mortgage agreement terms, but you may be able to waive this fee if you are remortgaging with the same lender.

If you are getting the help of a professional mortgage advisor to remortgage, you should also factor in these costs. The fees associated with this service can save you money and even stop you from making a costly remortgaging mistake, which is why they are strongly encouraged.

If you’re thinking about remortgaging and need guidance, look no further than Moneysprite mortgage advisors. We’ve helped scores of families to remortgage and save money!

If you need help with your mortgage, call us today: 0345 450 4660

Make an Appointment

Send a request and we’ll schedule a meeting