How to Remortgage: Step-by-Step UK Guide

On this page

Key takeaways

Remortgage when your deal is ending to avoid the standard variable rate
Start looking three to six months in advance
Compare a product transfer with a new lender, and the total cost including fees
Beware of early repayment charges if you switch early
Be careful about borrowing more or consolidating debt against your home

Remortgaging means replacing your current mortgage with a new one, either with your existing lender or a different one. Most people do it when their introductory deal ends, to avoid moving onto a higher standard variable rate. This guide explains when to remortgage, how it works, what it costs and how to get started.

Why people remortgage

Their deal is ending. This is the most common reason. If you do nothing, you usually move onto your lender's standard variable rate, which is often higher.
To get a lower rate. If better deals are available than your current one.
To release equity. Borrowing more against the value of your home for improvements or other needs.
To change the term or type of mortgage.
To consolidate debts. Be careful with this, since you would be converting unsecured debts into debts secured on your home.
A change in circumstances, such as adding or removing a person from the mortgage.

When to start

Mortgage offers can often be arranged three to six months before your current deal ends, and many allow you to lock in a rate in advance. If rates fall before you move, you may be able to switch to a cheaper deal, and if they rise, you are protected. Set a reminder in your calendar well before the end date.

Remortgage or product transfer?

Product transfer: you stay with your current lender and switch to a new deal. It is typically quicker, involves less paperwork and often no valuation or legal fees, but your lender may not offer the best rate on the market.
Remortgage with a new lender: you move to a different lender. It takes more time and may involve legal work and valuations, though many lenders offer free legal work and valuation as incentives. You can usually choose from a wider range of deals.

Compare both. A broker can help you do that, but ask whether they are paid by you, the lender or both.

What it can cost

Early repayment charge (ERC): if you leave your deal before it ends, you may owe a percentage of the outstanding mortgage. Switching at the end of the deal avoids it.
Arrangement or product fees: for the new deal.
Valuation and legal fees: may be free or paid by the lender, depending on the deal.
Exit or completion fees: charged by your existing lender to close the account.
Broker fees: if applicable.

Consider the total cost over the deal period, not just the headline rate. A low rate with a high fee may cost more than a slightly higher rate with no fee, especially for smaller mortgages. Our mortgage repayment calculator can help you test the effect of different rates.

What lenders will check

New lenders do an affordability assessment, so you will need documents showing your income, outgoings and identity. Your credit history also matters; see how credit scores work. Your home's value and the loan-to-value (LTV) ratio also affect the rates available. If your home has risen in value or you have paid off some of the mortgage, your LTV may have fallen, which can give you access to better rates.

Step by step

Check your current deal. Find out when it ends, the current balance, any ERC and the rate you will move onto.
Check your finances. Look at your credit report, your income and your spending.
Estimate your home value. Compare with the mortgage to find your LTV.
Compare deals. Look at fixed, tracker and other types; see fixed vs tracker mortgages. Look at the total cost.
Get advice. A regulated broker or adviser can help. You can also compare directly with lenders, including your own.
Apply. Provide documents and let the lender arrange a valuation.
Receive the offer. Check the rate, fees, term and ERC.
Complete. The new lender pays off the old one, and your payments move to the new deal.

Remortgaging with bad credit or difficulties

If your credit history has deteriorated, or you are in arrears, you may have fewer choices. Your current lender may offer a product transfer without a full affordability check in some cases, subject to the rules. If you are struggling to pay, speak to your lender early and see mortgage arrears: what to do. Free advice is available from MoneyHelper, Citizens Advice and StepChange.

Releasing equity and debt consolidation

Borrowing more against your home can fund improvements or other plans. However, you are increasing the debt secured on your property, and extending the term to reduce payments means paying more interest over time. If you use it to repay unsecured debts such as credit cards, you convert them into debts that can lead to repossession. Think carefully and get advice.

Keeping the benefit

Set a calendar reminder 6 months before your next deal ends.
Check rates every year, particularly if your deal is flexible.
Consider overpaying if your deal allows it. Check the limits, since many deals allow a percentage per year without charge.
Keep your credit file in good shape.

Worked example

Suppose you have £180,000 left on your mortgage and your fixed deal ends. Your lender's standard variable rate is higher than the best available deals. Moving to a new deal that is, say, two percentage points lower could reduce your monthly payment by well over £200, depending on the term. But if the new deal has a £1,500 fee and a short-term rate that rises later, the saving must be weighed against the cost. Always add up the full cost over the length of the deal. The figures here are for illustration only, and real rates will differ.

Overpaying or switching?

If you have spare cash, you could use it to overpay your mortgage, within the limits your deal allows. Compare the interest you save with what the money would earn in savings, and make sure you keep an emergency fund first. Some people reduce the balance enough to move into a lower LTV band at the next remortgage, which can improve the rates available.

Frequently asked questions

When is the best time to remortgage?

Usually three to six months before your current deal ends, once you know your options and costs.

Is it worth remortgaging for a small saving?

Only if the saving outweighs fees and any charges. Calculate the total cost over the deal period.

Will remortgaging affect my credit score?

A formal application leaves a hard search. Using an eligibility check or agreement in principle usually does not.

Can I remortgage if my home has lost value?

It may be harder if your LTV is high. A product transfer with your current lender might be easier.

Sources and further reading

Remortgaging — MoneyHelper
Consumer help and guidance — Financial Conduct Authority
Mortgage problems — Citizens Advice

This page provides general information only. It is not personalised financial, legal or tax advice, and rules and figures can change. Your situation is unique — please check official sources such as GOV.UK and MoneyHelper, and speak to a qualified, FCA-authorised adviser before making important decisions about your money.

Written by

MoneyBrink Editorial Team — Editorial team

The MoneyBrink Editorial Team researches, writes and reviews every guide on this site. We work from official UK sources such as GOV.UK, the Financial Conduct Authority, MoneyHelper and the Money and Pensions Service, explain things in plain English, and update articles when the rules change. We do not sell financial products and we do not give personal advice.

Read how we research and check our guides in our editorial policy.

mortgages remortgage buying a home

How to Remortgage: A Step-by-Step UK Guide