Remortgaging should be reviewed as a complete financial decision, not as a race towards the lowest advertised rate. The right route depends on the existing mortgage, the costs of leaving it, the borrower’s current circumstances and the plans for the property.
A review often begins when a fixed deal ends, the term needs changing, funds are required, or the existing structure no longer fits.
What does remortgaging actually mean?
Remortgaging usually means replacing the current mortgage with a new one from another lender. Moving to a new rate with the existing lender is normally described as a product transfer.
A product transfer can involve less administration and may not require a full affordability assessment where the borrowing is not increased. Moving lender normally brings a fresh application, affordability checks, a valuation and legal work.
Remortgaging: Deals & Options or a product transfer?
Neither route is automatically better. A product transfer offers simplicity, while a full remortgage allows the current lender’s offer to be compared with suitable alternatives.
| Route | What changes | Main point to check |
|---|---|---|
| Product transfer | A new deal with the current lender | Whether convenience outweighs alternatives elsewhere |
| Full remortgage | The mortgage moves to another lender | Eligibility, fees, legal work and total cost |
| Standard variable rate | The existing deal ends without a replacement | The lender can change the rate under the mortgage terms |
The current lender may still offer a suitable route after fees, criteria and timing are considered. A quick product transfer should not, however, be assumed to be the strongest option.
When should Remortgaging: Deals & Options be reviewed?
A review should normally begin up to six months before the current deal ends. This gives time to compare routes and prepare evidence without forcing a rushed application.
MoneyHelper recommends starting the search at least six months before a fixed or discounted deal moves to the lender’s standard variable rate. The date on which a new deal can be reserved varies by lender.
Starting early does not mean completing early. An early repayment charge may apply if the existing mortgage is repaid before the agreed date, so the completion date and offer validity must be aligned.
Which mortgage structures may be considered?
The available Remortgaging: Deals & Options can include fixed, tracker, offset, repayment and interest-only structures, subject to criteria and the borrower’s needs.
A fixed rate provides payment certainty for an agreed period but may carry an early repayment charge. A tracker usually moves with the Bank of England’s Bank Rate plus a lender margin. An offset mortgage links eligible savings to the mortgage calculation, although its rate, fees and access terms need checking.
An interest-only structure requires an acceptable plan for repaying the capital. Oakstead Finance’s guide to interest-only and repayment mortgages explains the difference.
How should the cost of a remortgage be compared?
Comparing Remortgaging: Deals & Options means looking beyond the headline rate to payments, product fees, valuation, legal costs, adviser charges, incentives and any early repayment charge.
A low rate with a large fee can cost more than a slightly higher rate with a smaller fee. Adding a fee to the mortgage also means paying interest on it unless it is repaid separately.
MoneyHelper advises comparing fees and charges as well as the rate. The relevant figure is the cost over the period the borrower expects to keep the deal, not an isolated monthly saving.
What costs can arise when moving lender?
A move to another lender can involve product, valuation, legal and administration costs. Some deals include incentives, but those incentives must be considered within the full price.
An early repayment charge is especially important. FCA rules require applicable charges to be disclosed, but the amount and expiry date come from the mortgage contract. Our article on mortgages without an early repayment charge explains why flexibility can matter.
Legal work is generally required when the mortgage moves lender because the old charge must be dealt with and the new mortgage registered. A solicitor or licensed conveyancer should confirm the position.
Does remortgaging to release funds make sense?
It can, but the purpose and long-term cost need careful examination. Additional borrowing may fund property work, family support or another planned expense, but it increases the debt secured against the home.
Using mortgage borrowing to repay unsecured debt can reduce the immediate payment while increasing the total repaid over a longer term. Oakstead Finance’s guide to the questions to ask before borrowing more covers the wider decision.
What will a new lender assess?
A new lender normally considers income, expenditure, credit history, property, loan-to-value and the purpose of additional borrowing. Passing the previous lender’s checks does not guarantee acceptance elsewhere.
The FCA responsible lending rules require lenders to consider affordability. Current income evidence, bank statements and details of financial commitments may therefore be needed.
Self-employment, variable income, a shorter remaining term, a lower property value or new credit commitments can all affect the available Remortgaging: Deals & Options.
How do property value and loan-to-value affect the options?
The lender’s valuation affects the loan-to-value ratio, which can influence product availability and pricing. A lower balance or higher accepted value may place the mortgage in a different loan-to-value band.
If the property is valued below expectation, the anticipated deal may no longer fit. Negative equity can make a move to another lender difficult, although the existing lender may still have product-transfer routes.
When might staying with the current lender be sensible?
Staying may be sensible where the current lender offers a suitable product, speed matters or a move elsewhere would fail on affordability, property or credit criteria. The decision should still follow a comparison.
A product transfer may avoid some legal and valuation work. It may not, however, solve a need for extra borrowing, a term change or a different mortgage structure.
In Summary
Remortgaging options should be judged by suitability and total cost. The main decision is often whether to take a product transfer, move lender or remain temporarily on the existing lender’s variable rate.
A review up to six months before the deal ends allows time to check charges, evidence, valuation, legal work and affordability. A lower headline rate is not automatically cheaper once fees and the intended deal period are included.
Additional borrowing deserves separate scrutiny because a smaller payment can conceal a higher long-term cost. Independent mortgage advice should be obtained before a decision, and a qualified conveyancer should confirm any legal issue. A borrower’s home may be repossessed if mortgage repayments are not maintained.
Frequently Asked Questions
These questions cover the practical points that arise when Remortgaging: Deals & Options are being reviewed.
How long does a remortgage take?
There is no single completion timescale. It depends on the lender, valuation, legal work, evidence and any property-title issue, so the case should be started early.
Can a borrower remortgage before a fixed rate ends?
Yes, but completing early may trigger an early repayment charge. The charge should be compared with any benefit from switching before the current deal expires.
What is a product transfer?
A product transfer is a move to another deal with the existing lender. It often involves less administration, but it limits the comparison to that lender’s products.
Does a full remortgage require legal work?
A move to a new lender generally requires conveyancing because the existing charge must be dealt with and the new charge registered. The appointed conveyancer should confirm the work required.
Will a remortgage involve a credit search?
A new lender will normally examine the applicant’s credit history. Repeated formal applications can add searches to the credit file, so suitability should be checked before submission.
Can a self-employed borrower remortgage?
Yes, subject to lender criteria and evidence of sustainable income. The required accounts, tax documents and assessment method vary between lenders.
Is a lower rate always the cheaper remortgage?
No. Product fees, legal costs, valuation charges, incentives and early repayment charges can outweigh a rate difference. Cost should be measured over the expected deal period.
What happens when a mortgage deal ends?
If no replacement is arranged, the mortgage will normally move to the lender’s standard variable rate under the contract. That rate is set by the lender and may change.
Can extra money be borrowed during a remortgage?
Potentially, subject to affordability, property value, loan-to-value and the lender’s rules for the purpose. The additional debt increases the amount secured against the home.
What happens if the property value has fallen?
A lower valuation raises the loan-to-value ratio and can reduce the product range. If the balance exceeds the accepted value, moving lender may be difficult.
Remortgaging is most useful when the decision starts with the mortgage that already exists. Oakstead Finance can compare the current lender’s offer with suitable alternatives and identify the costs or criteria that could change the result before a formal application.
