Do you need to remortgage?
When your term ends, you’ll need to remortgage or you could face higher rates. But there are other reasons to remortgage.
Head-turning deals from existing lenders
If your current lender offers a good remortgaging rate, or if your circumstances have changed since your mortgage term started, it might be an idea to stick with what you’ve got. Not sure what’s best? Ask us!!
What Does Remortgaging Mean?
Remortgaging refers to the process of taking out a new mortgage on a property you already own, effectively replacing your existing mortgage. Homeowners often choose to remortgage to secure a lower interest rate, switch between fixed and variable rates, release equity for purposes like home improvements or consolidating debt, or to adjust the mortgage term. Some people may also remortgage to move to a lender whose products better suit their current needs. Ultimately, remortgaging provides an opportunity to reassess your mortgage and ensure it aligns with your current financial goals and circumstances.
The Process of a Remortgage
The remortgaging process is generally more straightforward than applying for a mortgage to buy a home. Here’s how it normally works:
- Review Your Current Mortgage. Start by checking your current mortgage deal. Note when it ends and if there are any early repayment charges. You should also look closely at the interest rate you're paying - this will give you a baseline for comparing new deals.
- Shop Around for Deals. Compare remortgage offers from your current lender and other providers. Consider interest rates, fees, and terms. A mortgage broker like Mortgage Matters can help you access exclusive deals and identify the most suitable product.
- Apply for a Remortgage. Once you’ve chosen a deal, submit your application. This will usually include affordability checks, a credit check, and a valuation of your property.
- Property Valuation and Underwriting. The lender may carry out a physical or desktop valuation of your property. They'll also review your finances and documents to ensure you meet their criteria.
- Offer and Legal Work. If approved, you'll receive a formal mortgage offer. A solicitor or conveyancer will handle the legal side of the remortgage, making sure all necessary documents are properly completed, the property title is checked, and the previous mortgage is settled correctly.
- Completion. Once everything is in place, your old mortgage is paid off with funds from the new one, and you’ll begin making payments under the new agreement. If you're releasing equity, you'll receive the extra funds shortly after completion.
FAQs for Remortgages
Homeowners remortgage for a variety of reasons. One of the most common is to secure a better interest rate when their current deal ends. Others remortgage to release equity for home improvements, pay off other debts, or fund significant expenses like a new vehicle. Some may switch from interest-only to repayment mortgages, or vice versa, depending on financial goals.
Yes, it’s still possible to remortgage if you have a poor credit history. However, your options may be more limited, and you may face higher interest rates. Specialist lenders are more likely to consider applications from those with missed payments, CCJs, or defaults. Speaking to a broker can help you find suitable lenders.
Remortgaging can provide several advantages, including reducing your monthly payments and offering greater certainty through fixed interest rates. You may also gain access to better terms or features, allowing you to borrow additional funds, and improve flexibility with options like payment holidays or offset accounts. Overall, remortgaging is an effective way to adjust your mortgage to better suit your current financial situation, whether that means saving money or supporting new goals.
The remortgage process starts by reviewing your current mortgage and shopping around for new deals. Once you choose a lender, you'll submit an application with your financial details and supporting documents. A valuation and credit check will follow, and if successful, you’ll receive a mortgage offer. After the legal work is completed, your new mortgage replaces the old one. You can apply directly with a lender or through a mortgage broker who can help compare options and handle the process for you.
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