What is remortgaging and how does remortgaging work?

6 min read

Remortgaging is where you switch your mortgage. This is usually to get onto a better deal; however, you can also remortgage to release equity. Read on to learn more.

  • Ellie-Mae Johnson Deputy Conveyancing Manager
    Ellie Mae Johnson

    Deputy Conveyancing Manager

    Published July 10th 2023

the front of a picturesque cottage being remortgaged in order to complete some home improvements

Very simply, remortgaging is where you switch your mortgage. This is usually to get onto a better deal; however, you can also remortgage to release equity or to transfer equity.

Your current lender may have remortgage deals you can switch to, which will mean you don’t have to go through the same affordability checks, application process or the expense of a new valuation. However, it’s important to compare remortgage rates, as another bank or building society may be able to offer you a better deal.

In this article:

How long does remortgaging take?

When remortgaging with a new lender the whole process can take a couple of months, although it could take as little as two weeks if you’re staying with your current lender.

If you want to avoid moving onto a standard variable rate (SVR) – which is likely to involve much higher interest – you’ll need your new mortgage to align with the end of your current deal.

The good news is you can secure a new deal six months in advance, so start the process as early as possible. This gives you time to compare different deals, find the best rate and sort out your finances. You should also gather all your documents, like ID, bank statements, pay slips and proof of address. If you’re self-employed or a business owner, you’ll usually need to supply your last three years’ accounts or tax returns.

How does a remortgage work?

See below the steps you go through when remortgaging:

1. Check your current mortgage status

Get in touch with your mortgage provider to get a redemption statement. This will show the amount outstanding on your mortgage, which your new mortgage will have to cover. If there are any outstanding or overdue payments on your current mortgage, they must be repaid at completion.

2. Find a remortgaging deal that best suits your budget and needs

Speak to a mortgage advisor, or research mortgages to shop around and find a deal that suits you best. There are multiple mortgage types such as variable or fixed rate, as well as fixed rate terms, interest rate values and contract terms and conditions.

3. Find a conveyancer to complete the legal work on your behalf

You’ll need to choose and instruct a conveyancer, as they will need to complete the legal work on your behalf. Once you’ve given them permission to begin the process, they’ll check the legal status and title of your home to establish that your property fits the bill for a new mortgage. Find out more about the conveyancing process when remortgaging.

family enjoying breakfast in their new kitchen after selling old home and buying a new one

Conveyancing quote for your remortgage

Get a personalised quote today for your remortgage to see how much it may cost.

4. Make sure it’s the right time for you to remortgage

Is your fixed rate mortgage coming to an end? Has your property increased in value? Are you looking to release equity? If the answer is yes to any of these, then now might be a good time to consider remortgaging. Find out more about when you should remortgage and when it’s best not to.

5. Check your remortgage offer

Before submitting your application to the lender, one of the most important steps of the process is going through your lender’s mortgage offer. Check all your outstanding and new mortgage figures are accurate, and that your repayment method is correct.

Make sure that you fully understand the terms and conditions of your new offer and all of the remortgaging fees involved.

Remortgaging fees: how much does remortgaging cost?

Remortgage costs may be affected by different factors, such as the value of the property. You will also have to factor in the following fees:

  • Exit fee, this is the fee you’ll need to pay your current provider for closing your mortgage account. It’s typically between £50 – £300.

  • Early repayment charge (ERC) is the fee for repaying your mortgage early. It’s usually the percentage of the total outstanding debt and could be up to 5% of what you borrowed.

  • Application/ arrangement fees are the costs your lenders need to cover for arranging the mortgage and can be between £1,000 – £1,500. Some providers give you the option to pay these costs outright, or add them onto your mortgage.

  • Legal fees, lenders cover most of the legal fees, but if there are any extra charges, you need to pay them before your new deal.

  • Valuation fees – valuations are used to help the mortgage provider determine the value of your property to ensure they are happy lending the amount requested. The fees vary depending on a property’s value and their own fee scale however they usually cost between £200 – £300.

  • Conveyancing fees are costs for using a conveyancer, such as their legal fees and ID verification fees. This will typically cost between £200 – £400 for a freehold property.

For a personalised conveyancing quote, use our remortgaging calculator

Frequently asked questions when remortgaging

Find answers to frequently asked questions, from how to get a mortgage with a different lender to how to improve your chances of getting a good remortgage deal. Can’t find the answer you need? Just get in touch – we’d be happy to help.

How early can you remortgage?

You can secure a new deal six months in advance of your current mortgage term ending.

How long does remortgaging take?

Remortgaging typically takes between four and eight weeks, although it could be less if you’re staying with your current lender. To avoid moving onto a standard variable rate (SVR), you’ll need your new mortgage to align with the end of your current deal.

Can I get a mortgage with a different lender?

Yes, if you’ve found a cheaper, more flexible deal, you can switch to a different lender. But note that you might have to pay fees if your current deal hasn’t come to an end.

You’ll need to make an application for credit to prove you can repay your current mortgage and afford to take out a new loan.

Can I apply for a remortgage in advance?

You can secure a new deal six months in advance of your existing one coming to an end.

How will my loan-to-value (LTV) affect remortgaging?

LTV is the ratio of a loan to the value of the property. If you have a low LTV, you’re more likely to get better rates on mortgage deals

How can I improve my chances of getting a good remortgage deal?

Look for a new mortgage with an introductory deal (they usually last between two and five years). After that period, you’ll probably get the lender’s standard variable rate (SVR), which is usually higher.

Can I remortgage to buy another property?

Yes, you can remortgage your house and use the equity as a deposit for another property. Bear in mind though, if you do this, your monthly repayments will go up substantially. Find more information in our remortgaging to buy another property guide.

Why do I need to remortgage when transferring equity?

If you’re making changes to the title of deeds with the Land Registry, you will need to remortgage, as your mortgage lender will need to consent to the changes and update the mortgage with the new details.

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