Remortgaging

The most common reasons are:

• Secure a better interest rate, rather than defaulting to your lender’s standard variable rate.
• Reduce monthly repayments to free up income.
• Access equity built up in your home.
• Adjust the mortgage term — shortening it to pay less interest overall, or lengthening it to reduce monthly cost.

Where people are releasing equity, it is usually for:

• Home improvements, particularly extensions and energy efficiency work.
• Consolidating more expensive debt — though this secures previously unsecured borrowing against your home, which needs careful thought.
• Funding a major purchase such as a car or a wedding.

See what a new rate would cost

Our free mortgage calculator shows the monthly payment across different rates and terms, so you can compare a new deal against what you pay now.

Before comparing deals, establish the facts about your current mortgage:

• The end date of your current fixed or discounted term.
• Your outstanding balance, and the loan-to-value that implies at today’s property value.
• Any early repayment charges that apply if you leave before the term ends.
• Whether your existing lender offers a product transfer, which is often faster and cheaper than switching.

Then decide what you actually want from the new deal. Do you want lower monthly payments, extra funds for a large expense, or to clear the mortgage sooner? Those three goals point at different products.

• Fixed-rate deals — your rate and payment are locked for a set period, giving certainty at the cost of flexibility.
• Tracker rates — the rate follows the Bank of England base rate plus a margin, so payments move with it.
• Offset mortgages — your savings are linked to the mortgage and reduce the interest charged, useful if you hold significant cash.
• Discounted variable rates — a discount off the lender’s own variable rate, which the lender can change.

A better headline rate is only a saving after costs. The ones to budget for are:

• Early repayment charges, if you leave your current deal before the fixed term ends — often a percentage of the balance.
• Arrangement or product fees charged by the new lender, typically from nothing up to around £1,000.
• Valuation fees, where the lender requires a property valuation.
• Legal fees, if you are switching lenders and need a solicitor to transfer the mortgage.
• Broker fees, where the adviser charges one — many are paid by lender commission instead.

Compare the total cost over the deal period rather than the monthly payment alone. A slightly higher rate with no fees frequently beats a headline-grabbing rate with £1,500 of costs attached, particularly on smaller balances.

• Proof of income — payslips, or two to three years of accounts and tax returns if self-employed.
• Recent bank statements.
• Details of your existing mortgage and the property.
• Proof of identity and address.
• Details of your regular outgoings and any other credit commitments.

Start early. Begin researching three to six months before your current rate ends. Most offers can be held for up to six months, so you can secure a rate early and still switch if a better one appears.

Check the fees against the saving. Make sure the reduction in interest genuinely outweighs the switching costs over the life of the new deal.

Protect your credit score. Pay down outstanding debts and avoid new credit applications in the months before you apply — affordability and credit checks are stricter than most people expect.

Consider overpayments. Many deals allow overpayments of up to 10% a year, which reduces the balance and the total interest paid without needing to remortgage at all.