Remortgaging simply means switching your existing mortgage to a new deal — either with your current lender (called a product transfer) or with a different one. Most people remortgage when their fixed-rate period ends, because the alternative is landing on the lender's standard variable rate (SVR), which is almost always more expensive.
Why remortgage?
The most common reasons:
- Your fixed deal is ending — SVRs typically sit 1-2% above the best fixed rates. On a £200,000 mortgage, that difference could cost you £200+ per month.
- Better rates are available — your property may have increased in value, giving you a lower LTV and access to cheaper deals.
- You want to release equity — borrow more against your home for renovations, debt consolidation, or other purposes.
- You want to overpay or change terms — some deals are more flexible than others.
When to start looking
Start comparing deals about six months before your current rate expires. Most mortgage offers are valid for three to six months, so you can lock in a new rate well in advance. If rates drop between securing the offer and your start date, you can often reapply — there's no commitment until completion.
Your current lender will write to you a few months before your deal ends, usually offering a product transfer. These are quicker and cheaper (no valuation or legal fees) but aren't always the best rate on the market. Compare their offer against what's available elsewhere.
Early repayment charges
If you leave your deal before the fixed or discounted period ends, you'll usually face an early repayment charge (ERC). This is typically 1-5% of the outstanding balance — on a £200,000 mortgage, that could be £2,000 to £10,000. The charge usually decreases each year of the deal.
Sometimes it's worth paying the ERC if the savings from a better rate outweigh the penalty. But you need to do the maths carefully, or better yet, let a broker run the numbers for you.
The remortgaging process
- Check your current deal's end date and any ERCs
- Work out your property's current value (rough estimate is fine at this stage)
- Compare deals — use comparison sites, speak to your lender, or consult a broker
- Apply to the new lender (or request a product transfer)
- The new lender values your property (often automated, sometimes physical)
- If moving lender, a solicitor handles the legal transfer (some lenders provide free legal services)
- The new mortgage replaces the old one on the agreed date
Product transfer vs full remortgage
A product transfer with your existing lender is simpler: no credit check (in most cases), no valuation, no solicitor. You can often complete it online in minutes. The downside is you're limited to what your current lender offers, which may not be the best available rate.
A full remortgage with a new lender takes longer (4-8 weeks typically) and involves a valuation and legal work, but opens up the whole market. If your credit score has improved or your LTV has dropped since you last applied, you might get significantly better terms elsewhere.
Should you use a broker?
For most people, yes. A whole-of-market mortgage broker compares thousands of deals and knows which lenders are best for different situations. Many work on commission from the lender, so there's no fee to you. They also handle the paperwork and chase progress, which saves considerable hassle.
The exception might be if you're doing a simple product transfer with your current lender and their rate is competitive. In that case, doing it yourself online takes five minutes.
Costs of remortgaging
Potential costs include: arrangement fee (£0-£2,000, sometimes added to the loan), valuation fee (often free), legal fees (often free with a new lender deal), and early repayment charges on your existing deal. Weigh these against the monthly savings over the new deal period to see if switching makes financial sense.