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What is remortgaging?

Remortgaging is the process of moving your mortgage on your existing property from one lender to another.

Your new mortgage will then replace your old one.

You may want to remortgage if you’re:    

  • coming to the end of your existing rate

  • looking for a better deal than your current lender can offer

  • planning to borrow more money against your property

How does remortgaging work?

Here are some of the key steps if you’re looking to remortgage:

1. Do your research 

There are many mortgage deals on the market and it can help to shop around to find the right one for you. This includes asking your current lender what rates they can offer and whether you can switch to a new mortgage rate with them, before looking elsewhere. Remember – advice and support is available if you’d like help.

There may be costs when moving your mortgage to a new lender so it’s important to understand if it’s financially worthwhile. To help you understand, you can calculate your new mortgage repayments and see if the benefits of remortgaging outweigh any costs involved in doing so.

These costs can include:

  • booking or completion fees charged by a new lender

  • conveyancing costs

  • property valuation costs

  • early repayment charges (ERC) or exit fees charged by your current lender

2. Get a Decision in Principle

A Decision in Principle – also known as an Agreement in Principle – gives you a clear idea of how much you could borrow based on your circumstances. It usually involves a soft credit check to look at your credit history, but it will have no impact on your credit score.

A Decision in Principle is not a guarantee that your mortgage application will be accepted, but it can help you understand your options and what you may be able to afford.

3. Apply for your remortgage

You can apply for a remortgage in a number of ways including online or over the phone. Your new application will involve a credit check and you will be asked to provide a number of documents. For example:

  • ID such as a passport or driving licence

  • proof of earnings

  • details of your outgoings including any financial commitments

4. Review your offer 

Your new lender will need to arrange a valuation of your property and this will, sometimes, be completed without the need to visit your property as it can be done electronically. Once this is completed and your lender has approved your application, they’ll send you an offer for you to review and accept.

5. Complete the legal work

A solicitor or licensed conveyancer will manage the paperwork and any transfer of funds on your behalf. They’ll check that your new mortgage amount is enough to pay off your existing lender and send you the legal documents to read and accept. Some lenders will appoint a solicitor or licensed conveyancer on your behalf or you may be able to choose your own.

6. The final step

When your new mortgage is set up and the legal work has been done, you’re ready for completion.

The completion date is when your new mortgage starts and your old mortgage is repaid. Your new lender will then write to you to let you know the date and amount of your first new mortgage payment.

How long does the remortgage process take?

Remortgaging your home typically takes 4 to 8 weeks after applying. The amount of time needed will depend on your individual circumstances and remortgage needs.

Providing clear, accurate, and relevant documents when needed, such as proof of earnings can speed up the process.

When should you remortgage?

You can remortgage anytime but to avoid potential early repayment charges, people tend to look at remortgaging towards the end of their existing mortgage rate.

If you choose not to review your mortgage rate before it ends, then you will likely be moved onto your lender’s standard variable rate (SVR) and you could end up paying more. This is because the SVR is generally higher than the rate you were on.

Keep in mind – if you’re not coming to the end of your existing mortgage rate, you’ll need to check whether there’s an early repayment charge or fee for exiting your current mortgage.    

Explore: Remortgage to HSBC

Think carefully before securing other debts against your home.

Your home may be repossessed if you do not keep up repayments on your mortgage.