Remortgage in the UK: How It Works
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Remortgaging means paying off your current mortgage with a new one, usually from a different lender, and is most often done when a fixed or tracker deal is ending. This page explains how to remortgage in the UK, when to start, how much you might be able to borrow, and how it differs from staying with your current lender.
What does remortgage mean?
To remortgage means to switch your existing mortgage to a new deal on a home you already own. People also ask “what is a remortgage?”, and the answer is the same. You can move your loan to a new lender, or take a new deal with your current lender, which is called a product transfer. Either way, you repay your old mortgage and start a new one, usually with a different interest rate or different features.
A remortgage is different from buying a home. Your property stays the same, and the balance you owe is carried over to the new deal, unless you choose to borrow more. If you want an overview of the rate types you may be choosing between, see our guide to mortgages explained.
Why people remortgage
- Your deal is ending. This is the most common reason. When a fixed or discounted rate finishes, your mortgage usually moves onto the lender's standard variable rate, which is often higher than the rates on new deals.
- Your loan-to-value has improved. If your home has gone up in value or you have paid down your balance, you may qualify for a cheaper pricing band.
- You want to borrow more. For example, for home improvements, or a deposit on another property.
- Your plans have changed. You may want a longer fix, a bigger overpayment allowance, or a different mortgage term.
When to remortgage
Many people start looking about six months before their current deal ends. Some lenders let you secure a new rate months ahead of time, so you can switch as soon as your current deal finishes, without waiting and without paying the higher standard variable rate.
A simple timeline looks like this:
- About six months before: check when your deal ends and what any early repayment charge is, and start comparing deals.
- About three months before: apply, so the new deal is ready to start when the old one ends.
- At the end of your deal: your new mortgage begins and the old one is repaid.
If you leave a deal early, you may have to pay an early repayment charge. Check your mortgage paperwork for the exact figure before you decide.
Remortgage or product transfer?
When your deal ends, you have two main options: stay with your current lender on a new deal (a product transfer), or move your loan to a new lender (a remortgage).
| Product transfer | Remortgage to a new lender | |
|---|---|---|
| Who you borrow from | Your current lender | A new lender |
| Choice of deals | Only your lender's range | The wider market |
| Paperwork | Usually less; often no valuation or legal work | Full application, valuation and legal work |
| Typical timescale | Often around a week | Usually four to eight weeks |
| Suits | A straightforward switch where the balance stays the same | Borrowing more, a better rate elsewhere, or features your lender lacks |
The lowest headline rate is not always the cheapest deal overall, so compare the total cost, including fees, rather than the rate alone.
What it can cost to remortgage
Remortgaging can cost close to nothing on a fee-free deal that includes free legal work, or a few thousand pounds once arrangement fees and any early repayment charge on your old deal are added together. The main costs to check are the new lender's product fee, valuation and legal fees, your current lender's exit and deeds release fees, and any early repayment charge.
Our full guide, how much does it cost to remortgage, breaks down every fee with typical amounts and a worked example. To see how a new rate changes your monthly payment, try our remortgage calculator.
How to remortgage, step by step
- Check your current deal. Find out when it ends, what you still owe, and whether an early repayment charge applies.
- Work out your home's value and your loan-to-value. A lower loan-to-value can open up cheaper rates.
- Check your credit report. Fix any errors before you apply.
- Compare deals. Look at the rate, the fees, how long the deal lasts, and any overpayment allowance. An adviser can compare the market for you.
- Apply. Lenders usually ask for ID, proof of address, recent payslips and bank statements.
- Valuation and legal work. The lender values your home, and a solicitor handles the legal side (if the deal needs it).
- Complete. Your old mortgage is repaid and your new one starts.
When you are ready, you can get a free quote to start.
How much can I remortgage my house for?
How much you can remortgage your house for depends mainly on two things: how much your home is worth compared with what you owe (your loan to value, or LTV), and whether a lender thinks you can afford the payments on your income.
For example, if your home is worth £250,000 and you owe £150,000, your LTV is 60%. Many lenders will lend up to 75%, 85% or sometimes 90% LTV on a remortgage, so at 75% you could in theory borrow up to £187,500, which would release about £37,500 on top of your current balance, subject to affordability checks. You can try your own figures in our remortgage calculator.
You may be able to borrow more against your home when you switch, for example to pay for improvements. Lenders will check that you can afford the higher payments.
Using a remortgage to pay off other debts, such as credit cards or loans, means unsecured debt becomes secured on your home. You may also pay more interest overall if the debt is spread over a longer term. Think carefully and get advice before you do this.
Fixed rate remortgage or tracker?
Most people who remortgage choose a fixed rate remortgage, usually for two or five years, so their monthly payment stays the same while the deal lasts. A tracker follows the Bank of England base rate, so payments can go down as well as up. Fixed deals often have early repayment charges if you leave during the fixed period, so think about whether you might move or want to overpay before you choose a term.
Common mistakes to avoid
- Leaving it too late and drifting onto the standard variable rate
- Choosing the lowest rate without checking the product fee and other costs
- Leaving a deal early without checking the early repayment charge
- Taking on new credit, or changing jobs, while your application is in progress
- Not checking whether a product transfer with your current lender would be simpler
Remortgage FAQs
What does remortgage mean?
To remortgage means to switch your existing mortgage to a new deal on the home you already own, either with a new lender or with your current lender. People usually do it to get a better rate when a deal ends, to borrow more, or to change the features of their mortgage.
When should I remortgage?
Many people start looking about six months before their current deal ends. Some lenders let you secure a new rate months ahead of time, so you can switch as soon as your current deal finishes.
What happens if I do not remortgage when my deal ends?
Your mortgage usually moves onto your lender's standard variable rate, which is often higher than the rates available on new deals. Your payments could go up as a result.
Is remortgaging the same as a product transfer?
No. A product transfer is a new deal with your current lender, which is often quicker and needs less paperwork. A remortgage moves your loan to a new lender, which gives you access to the wider market.
How long does it take to remortgage?
A product transfer can take around a week. A remortgage to a new lender usually takes four to eight weeks, and can take longer in complex cases.