How remortgaging works — and when to start the process
Quick answer: Remortgaging means moving to a new mortgage deal — either with your existing lender (a 'product transfer') or with a different one.
Remortgaging means moving to a new mortgage deal — either with your existing lender (a 'product transfer') or with a different one. Most fixed-rate deals end after 2 or 5 years and roll on to the lender's standard variable rate, which is typically 2–4% more expensive than current new-business deals. Starting the process around six months before your current deal expires lets you lock in a new rate while you're still on the cheaper one, and switch into something cheaper again if rates fall before completion. The single biggest cost of remortgaging badly is doing nothing — silently rolling onto SVR can cost a £200,000 borrower hundreds of pounds extra every month.
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Primary source: fca.org.uk/firms/mortgages
When to start
Six months before your current deal ends is the sweet spot. Most lenders allow you to apply for a new rate that far in advance and most rate offers are valid for 3–6 months — so you can lock in early and switch into something cheaper if rates fall before completion.
Letting the deal end without action means you revert to the lender's standard variable rate, which is usually significantly more expensive than current new-business deals.
Product transfer or new lender?
A product transfer is a new rate from your existing lender. It is usually the fastest option, often with no fees, no new affordability check and no legal work.
Switching to a new lender often unlocks a slightly cheaper rate, but involves a full mortgage application, a new credit check, a property valuation and conveyancing. Many lenders pay for valuation and legals on remortgage deals.
Compare both. A product transfer that saves £40 a month is often better than a new-lender deal that saves £55 a month but takes 8 weeks of paperwork.
Costs and pitfalls
Product fees on the new deal (often £999) can usually be added to the loan — but then they accrue interest, so paying them upfront is normally cheaper if you can.
Watch the early repayment charge (ERC) on your existing deal. ERCs typically taper from 5% in year one to 1% in year five, so the timing of your switch matters.
Avoid a 'free' deal if it locks you into the lender's standard variable rate at the end of a short product term — read the offer carefully.
Worked example — the cost of doing nothing
A borrower with £200,000 outstanding on a 25-year repayment mortgage rolls off a 4.0% fix onto an SVR of 7.5%. The monthly payment jumps from roughly £1,056 to £1,478 — an extra £422 a month, or just over £5,000 a year.
Remortgaging to a new 4.5% 5-year fix would have brought the payment to about £1,112 — saving £366 a month vs SVR. Across a 5-year fix, that is over £21,000 of avoidable cost.
The cheaper the new product, the more remortgaging is worth doing — but even moving from SVR to a slightly less attractive fix is almost always a saving.
When staying on SVR (briefly) makes sense
If you are mid-sale and expect to redeem the mortgage in 2–3 months, paying SVR for a short period can be cheaper than committing to a new deal with an early repayment charge.
If you are about to inherit money or otherwise repay the mortgage in full, a tracker or SVR (which usually has no ERC) can be cheaper than a new fix.
Some 'porting' arrangements let you take an existing fixed-rate product with you when you move — but lenders re-underwrite the new loan, so this is not a guarantee.
Common questions
- Do I need a solicitor to remortgage?
- Yes if you are switching lender — but most remortgage products include 'free legals' as part of the deal. A product transfer with your existing lender does not need a solicitor.
- Will I need to prove my income again?
- Usually yes if you switch lender. A product transfer with your existing lender typically does not require a fresh affordability assessment as long as you are not increasing the loan amount.
- Can I overpay before remortgaging to get a better rate?
- Yes, and it's often a smart move. Bringing your loan-to-value below the next price band can drop the rate by 0.20–0.60%, often saving more over the next fixed period than the lump sum you paid in.
- How long does a remortgage take?
- Product transfers with the existing lender are usually completed within 1–2 weeks. Switching to a new lender typically takes 4–8 weeks from application to completion — start at least 4 months before your current deal ends to be safe.
- Can I borrow more when I remortgage?
- Yes — known as 'capital raising'. The lender will re-assess affordability and may want to know what the extra borrowing is for. Common reasons include home improvements, debt consolidation or a deposit to help a family member buy a property.