Remortgaging is when you take out a new mortgage on a property you already own, rather than buying a new one. You'll either be switching to a new deal with your current lender or moving to a different lender altogether.
There are a few common reasons why you might think about remortgaging:
- Your current deal is ending, and you don’t want to be moved onto your lender’s standard variable rate (SVR)
- You want to reduce your monthly payments by finding a lower interest rate
- You’d like to borrow more money (for example, for home improvements)
- You’re looking to fix your rate for longer, to give you more certainty
- You want to consolidate other debts
Remortgage types
There are two ways to remortgage:
Product transfer (staying with your current lender)
This is usually the simplest route. You’re just switching to a new deal with the same lender, and you won’t need legal work or a full application. It’s often called a ‘rate switch’.
Full remortgage (switching to a new lender)
This gives you access to the whole market, so you might find a better rate. But it’s a bit more involved. You’ll need to go through affordability checks, provide paperwork, and have your home valued again. The new lender will also carry out legal checks.
If you’re not sure which way to go, it’s a good idea to chat to your L&C mortgage adviser. They’ll talk you through both options and help decide which one is best for your circumstances.
Reasons to remortgage
To save money
If your current mortgage deal is ending soon, you’ll probably be moved onto your lender’s Standard Variable Rate (SVR). This rate is often a lot higher, which means your monthly payments could go up. Remortgaging before this happens gives you the chance to lock in a better deal and keep your costs down.
To get a better rate
Even if your deal isn’t ending yet, your circumstances might have improved which means you could get access to better rates. Lenders often reward lower-risk borrowers with lower interest rates.
To borrow more
Need money for a new kitchen, loft conversion or wedding? Remortgaging can allow you to borrow extra funds by increasing your loan.
To pay off debts
Some people choose to remortgage to consolidate debts, bringing things like loans or credit card balances into their mortgage. This can make monthly outgoings easier to manage, but it's important to get advice.
To get more flexibility
Remortgaging gives you the chance to find a deal that lets you overpay, take payment holidays, or switch to something more flexible if your income varies.
Because life’s changed
Whether you’ve separated from a partner, started a family, or are thinking about buying another property remortgaging could help make things easier or free up options for your next steps.
Remortgage terms
Mortgages come with a lot of terms that aren’t always clear. Here’s a quick guide to the ones you’re most likely to come across:
LTV (Loan-to-Value)
This is the size of your mortgage compared to the value of your home. A lower LTV usually means better rates. For example, if your home is worth £200,000 and you owe £100,000, your LTV is 50%.
SVR (Standard Variable Rate)
This is your lender’s basic rate. It often kicks in when your deal ends, and it’s usually more expensive. It can change at any time, so your payments could rise without warning.
ERC (Early Repayment Charge)
Some deals come with a penalty if you leave them early. Your L&C adviser will check this before recommending a switch. It’s important to know if charges apply before making changes.
Fixed rate
A fixed rate means your monthly payments stay the same for a set period, usually 2, 3 or 5 years. It gives you certainty and helps with budgeting.
Tracker rate
This follows the Bank of England base rate. Your payments can go up or down over time. It’s a good option if you think rates might fall, but it’s less predictable.
Product fee
This is what a lender might charge to set up a new mortgage deal. Sometimes it’s called an arrangement or booking fee. Some deals don’t have one at all.
Free legals / free valuation
Some remortgage deals include a solicitor and property valuation at no cost to you, though the legal service might be more basic. Always check what’s included. Other lenders may offer a cash incentive to help you find your own solicitor. Your L&C adviser will be able to find the best option for your needs,
Remortgaging doesn’t have to be hard
If you haven’t reviewed your mortgage for a while, it’s a good idea to speak to your L&C adviser. They’ll help you make sense of your options, explain what’s possible, and guide you through the whole process, for free.
Even if you decide to stick with your current deal, you’ll have peace of mind knowing you’re not missing out.
