Remortgaging: A Complete Guide to Switching Your Mortgage

For many homeowners, a mortgage isn't something you arrange once and then forget about. As your circumstances change, it may be worth reviewing whether your existing mortgage continues to meet your needs.

Remortgaging involves replacing your current mortgage with a new one. This may be with your existing lender or with a different lender, depending on your circumstances and the options available.

People remortgage for many reasons, including securing a new interest rate, releasing equity, reducing monthly payments or financing home improvements.

At The UK Adviser, we help homeowners understand their remortgage options and guide them through the process from initial enquiry to completion.

What Is a Remortgage?

A remortgage is the process of replacing your existing mortgage with a new mortgage secured against the same property.

This may involve:

• Moving to a new lender.
• Taking a new mortgage with your existing lender.
• Borrowing additional funds.
• Changing the mortgage term.
• Changing the type of mortgage.

Every remortgage is assessed individually.

Why Do People Remortgage?

There are many reasons why homeowners choose to remortgage.

These include:

• Your fixed-rate mortgage is coming to an end.
• You're moving onto your lender's Standard Variable Rate (SVR).
• You want to reduce your monthly payments.
• You wish to borrow additional funds.
• You want to finance home improvements.
• You're consolidating existing borrowing, where appropriate.
• Your property has increased in value.
• Your financial circumstances have changed.

The most suitable solution depends on your objectives and personal circumstances.

When Should You Start Looking?

Many homeowners begin reviewing their mortgage options several months before their current deal expires.

Starting early may allow sufficient time to:

• Review available products.
• Gather documentation.
• Compare lenders.
• Arrange a new mortgage before moving onto a higher variable rate.

Your adviser can help identify an appropriate time to begin the process.

Product Transfer or Remortgage?

If you're approaching the end of your mortgage deal, you may have two broad options:

Product Transfer

A product transfer involves taking a new mortgage product with your existing lender.

This can sometimes involve a simpler application process, although the products available will be limited to those offered by your current lender.

Remortgaging to a New Lender

Moving to a different lender may provide access to a wider range of products and criteria.

Whether this is appropriate depends on your circumstances and the overall costs involved.

Can You Borrow More Money?

Yes, subject to lender criteria.

Many homeowners remortgage to raise capital for purposes such as:

• Home improvements
• Property renovations
• Purchasing another property
• Business investment
• Paying school fees
• Other significant expenditure

The lender will assess affordability and the purpose of the additional borrowing.

How Much Can You Borrow?

The amount available depends on factors including:

• Property value
• Existing mortgage balance
• Income
• Credit history
• Financial commitments
• Affordability
• Loan-to-Value (LTV)

Every lender uses its own affordability assessment.

What Is Loan-to-Value?

Loan-to-Value (LTV) represents the percentage of your property's value that is secured by your mortgage.

If your property has increased in value or you've reduced your mortgage balance, your LTV may improve.

A lower LTV may provide access to a wider range of mortgage products.

Costs of Remortgaging

Before changing your mortgage, consider the overall costs.

These may include:

• Mortgage arrangement fees
• Valuation fees
• Legal fees
• Early repayment charges
• Exit fees

The cheapest interest rate does not always represent the best overall value once fees have been considered.

Early Repayment Charges

Some mortgages include Early Repayment Charges (ERCs).

These charges may apply if you repay or replace your mortgage before your current deal ends.

Always check your mortgage offer or latest mortgage statement before proceeding with a remortgage.

What Documents Will You Need?

Lenders commonly request:

• Identification
• Proof of address
• Payslips or proof of income
• Bank statements
• Mortgage statement
• Property information

Self-employed applicants may also need SA302s, Tax Year Overviews and business accounts.

How Long Does a Remortgage Take?

Timescales vary depending on the lender, solicitor and complexity of the application.

Factors affecting timescales include:

• Property valuation
• Legal work
• Documentation
• Lender processing times

Preparing your documents early may help reduce delays.

Can You Remortgage if You're Self-Employed?

Yes.

Many lenders consider self-employed applicants, including:

• Sole traders
• Company directors
• Partnerships
• Contractors

The documents required and the way income is assessed vary between lenders.

Can You Remortgage With Bad Credit?

Possibly.

Some lenders consider applicants with previous credit issues, although eligibility depends on factors including:

• Type of credit issue
• When it occurred
• Current financial position
• Property equity
• Overall affordability

Professional advice may help identify suitable lenders.

Why Use a Mortgage Adviser?

Every lender has different affordability calculations, lending policies and product criteria.

A mortgage adviser can help you:

• Review your current mortgage.
• Compare products.
• Assess the total cost of changing lender.
• Understand fees and charges.
• Identify lenders suited to your circumstances.
• Manage the application from start to finish.

Professional advice can help ensure you make an informed decision.

Frequently Asked Questions

What is a remortgage?

A remortgage replaces your existing mortgage with a new mortgage, either with your current lender or a different lender.

How early should I remortgage?

Many homeowners start reviewing their options several months before their current mortgage deal ends.

Can I remortgage before my fixed rate ends?

Possibly, although Early Repayment Charges may apply.

Can I borrow more money when remortgaging?

Subject to lender criteria and affordability, additional borrowing may be available.

Will I need a solicitor?

Many remortgages involve legal work, although some lenders provide legal services as part of the remortgage process.

Can I remortgage if my property has increased in value?

An increase in property value may reduce your Loan-to-Value ratio, which could improve the range of products available.

Why Choose The UK Adviser?

Remortgaging is about more than simply finding a lower interest rate.

At The UK Adviser, we help homeowners understand the full picture, including interest rates, fees, affordability and long-term financial objectives.

We can assist with:

• Residential remortgages
• Capital raising
• Home improvement finance
• Self-employed remortgages
• Buy-to-let remortgages
• Later life remortgages
• Specialist lending solutions

Our experienced advisers take the time to understand your circumstances and recommend suitable options based on your individual needs.

Speak to The UK Adviser

Whether your current mortgage deal is coming to an end or you're considering raising capital for future plans, our experienced advisers can help you understand your remortgage options.

We'll explain the process, compare available products and help you decide whether remortgaging is appropriate for your circumstances.

Contact The UK Adviser today to discuss your remortgage requirements.

Your home may be repossessed if you do not keep up repayments on your mortgage.