Your current mortgage may not be your next best option.
Understand how remortgaging works, when homeowners consider switching deals, what costs can apply and how to compare a new mortgage with your existing one.
Is it time to review your mortgage?
A remortgage decision should consider the total cost, not just the headline interest rate.
What does remortgaging mean?
Remortgaging means replacing your existing mortgage with a new mortgage, either with your current lender or a different lender. Homeowners may consider it when their current deal is approaching its end or when their circumstances and available mortgage options have changed.
The aim is not simply to find a lower interest rate. You should also consider product fees, legal costs, valuation costs, early repayment charges and the features of the new mortgage.
Four steps to a more informed mortgage review.
Remortgaging does not have to be complicated. Breaking the decision into a few practical stages can make it easier to compare your options.
Review your current deal
Check your outstanding mortgage balance, interest rate, remaining term and when your current deal ends.
Check your property value
Your property's current value can influence the loan-to-value ratio used when considering mortgage options.
Compare new deals
Consider rates, fees, early repayment charges, flexibility and the total cost over the relevant period.
Apply and switch
If a new mortgage is suitable, the lender will assess your application before the new deal completes.
Your property value can change the mortgage picture.
Loan-to-value, or LTV, compares the amount you owe on your mortgage with the property's value. If the property value has increased or your mortgage balance has fallen, your LTV may be lower than when you originally borrowed.
A lower LTV can sometimes provide access to different mortgage pricing or products, although lenders consider many other factors too.
Property value is only one part of a remortgage assessment.
Why might a homeowner consider remortgaging?
There is no single reason to remortgage. The right decision depends on your current deal, financial circumstances and what you want from your next mortgage.
A lower rate does not always mean a lower total cost.
Before switching, add the relevant costs to your comparison. The cheapest-looking rate may not produce the lowest overall cost once fees are included.
Interest rate
Compare the initial rate and understand what happens when any introductory period ends.
Product fees
Some mortgage products include arrangement or product fees which should be included in your comparison.
Early repayment charges
Leaving a mortgage before the relevant period ends may result in an early repayment charge depending on your deal.
Other costs
Valuation, legal or administration costs may apply, depending on the mortgage product and circumstances.
Compare your existing mortgage with the complete new deal.
A remortgage comparison should look at the total cost over a meaningful period rather than focusing on one headline figure.
Remortgaging is not automatically the right choice.
Switching a mortgage can involve costs and changes to your financial commitments. Consider the full picture before deciding.
Switching costs
Fees and early repayment charges can reduce or remove the potential benefit of a new mortgage.
Future rates
A new rate may be fixed for a period and can later change depending on the mortgage product and its terms.
Borrowing more
Increasing your mortgage to release equity can increase the amount you owe and the total interest paid.
Remortgaging FAQs
Answers to common questions about switching mortgage deals, costs, timing and eligibility.
Review your mortgage before you make the switch.
Compare your current deal with potential alternatives, including rates, fees, repayment costs and mortgage features, before deciding whether remortgaging is right for you.