Everything you need to know about Remortgaging

Whether you want to remortgage to cut your costs by moving to a better deal, raise some extra cash, or release some money from your property for another purpose we can help access the right broker to make the process quick and easy.

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People remortgage for a variety of reasons. While remortgages work in a similar way to traditional mortgages, the process for getting one is slightly different.

What does it mean to remortgage?

You can consider remortgaging any property you own, whether you have a current mortgage or already own your property outright. When you remortgage you switch away from your current mortgage to a new deal. You can do this through your existing lender or move to a new provider.

Why should I remortgage?

There are a variety of reasons people look to arrange a remortgage. Whether you want to cut your costs by moving to a more competitive rate or simply need to raise some extra cash, remortgaging can work for all kinds of purposes.

Is it easy to remortgage?

Remortgaging is usually very easy, especially compared with getting a mortgage to purchase a property. If you want to remortgage you simply need to find the mortgage you want, make your application, and your solicitor and lender will take care of the rest.

There’s no chain to worry about, no house to buy or sell, no contracts to exchange, fewer searches required (if any), and the general legal process of registering the charge with the new lender is far more simple too.

Although many remortgages will require a valuation, some lenders have automated services for properties at lower loan-to-value ratios and will remove the need if a property or deal is clearly a safe bet.

How quick is it to remortgage?

There are many different factors that can impact on how long a remortgage may take. These can include the complexity of your circumstances, how quickly any information required can be obtained and a valuation of your property.

How much does it cost?

There are a number of different fees that can be associated with a remortgage. The specialist mortgage broker can advise you on what these may be but typically can include:

  • Arrangement fees;
    these are charged by the lender to establish your new mortgage, the amount will vary depending on the provider and the mortgage deal you’re applying for. They can be charged as a fixed amount or a percentage of the total sum you’re borrowing. You can either pay this fee upfront as a one-off cost or add it to your mortgage.
  • Booking fees;
    some lenders will make this charge on top of the arrangement fee and is usually a non-refundable, one-off upfront payment of between £100 and £200. Not all lenders will add this cost, but it’s worth finding out if it applies for the deal you’re interested in.
  • Legal fees;
    you’ll need to appoint a solicitor or conveyancer to sort out the legal side of your remortgage. Some lenders have remortgage deals which come with free legal work, perhaps because the work is less involved for a remortgage and so the costs are usually a lot less than your original mortgage.
  • Valuation fees;
    not all remortgages require a valuation but if you’re moving to a new lender they want to get a valuation of your property before agreeing to the remortgage to be sure of the property’s market value. They will usually appoint their own valuer or surveyor but, unless the deal comes with a free valuation, the cost will be passed on to you. Valuation fees vary according to the size of the property but can be anywhere between £250 to £1,500. The other, sometimes more costly charges associated with remortgaging will depend on the current mortgage arrangement you have. Check with your current lender to find out if either of the following charges might apply:
  • Early repayment charges (ERCs);
    this is a fee you may need to pay if you want to exit your current mortgage deal before the end of the term. Early repayment charges won’t always apply, but they can be steep, so be sure to check your terms to see if there is one attached to your contract.
  • Exit fees;
    also known as a mortgage completion fee, this is an administration cost applied by lenders when you pay off your mortgage in full –in this case due to remortgaging with a new lender. Exit fees are also charged when you reach the end of your mortgage term and make your final mortgage payment.

Will remortgaging affect my credit score?

Remortgaging might actually be a great way to help rebuild your credit history. By using a remortgage to consolidate multiple debts, you may find it easier to keep track of your repayments. It’s also a good way to show your current, and future, lender that you are able to handle your debts responsibly.

You could even save money because interest on a mortgage is usually charged at far lower rates than you will find with personal loans or credit cards.

What if I’ve been declined in the past?

Don’t despair, if you’ve been declined for a remortgage there are steps you can still take to secure a deal:

  1. Take note of why the lender turned down your application, if they don’t give you a reason, ask them to tell you. It could be because of your credit history or affordability, but knowing the specifics will help you find a deal which will work.
  2. Make an enquiry and chat things through with one of the whole-of-market brokers we work with. Explain what kind of remortgage you’re looking for and the reason you were declined previously.
  3. Sit back and let them search the entire market on your behalf for the lender who is best positioned to help you out where others couldn’t.

Going about things this way could help prevent your credit rating being negatively affected, as approaching several different lenders could leave an unnecessary trail of black marks on your file.

Finding a specialist broker in arranging the type of remortgage you’re looking for is important. Get in touch and we’ll help you access a broker who has helped customers in similar circumstances.

Can I remortgage to raise a cash lump sum?

Yes, it’s possible to remortgage to raise a cash lump sum. The reason you want to raise the cash may affect the lender you can approach but a whole-of-market mortgage broker will be able to help you understand the options you have.

If you are over 55 and own your house outright, you may want to consider an equity release mortgage as an alternative. Whether equity release of this nature is right for you will depend on your specific set of circumstances, and you can learn more in our guide to equity release mortgages.

How much can I raise?

How much you can raise by remortgaging will depend on the loan-to-value, or how much equity you hold in your property. Most lenders allow borrowers to remortgage up to 90%, so if your property is worth 100k, you should expect to be able to borrow 90k.

You’ll also need to prove your affordability; most lenders will let you borrow around 4.5 times your annual income, although in certain circumstances you can borrow more than this limit.

What if I have no equity?

If you have no equity in your property, you’ll most likely need to borrow more that 90% of the value so you could find it hard to get a better rate than you’re already on.

It may be possible to get a remortgage at 95% but remember to factor in all the associated costs and charges of making a switch as you may find yourself out of pocket even though your original intention was to make a saving.

Are there other alternatives?

Absolutely. If you’re looking to raise capital, a remortgage isn’t your only option and, depending on your circumstances, raising the cash with a remortgage may not be the most cost effective option. A popular alternative you could consider is a second charge mortgage, also known as a homeowner loan. If you want to borrow less than £25,000 an unsecured personal loan might be another possibility.

Can I remortgage if I have a secured loan?

Yes, this is possible, and it’s relatively easy to do. If you don’t want to repay the secured loan you’ll need to have enough equity and be able to satisfy the new lender’s affordability requirements.

Remortgaging could provide you with an opportunity to wrap your second charge mortgage into the same loan so you are only making one loan repayment each month.

Can I remortgage with bad credit?

Yes, a remortgage with bad credit may be possible. Depending on the severity of your credit issues and your loan-to-value, you could still get competitive rates. However, if you have more severe credit issues and a higher LTV, and you’re already on a decent mortgage rate, then you may be better off sticking.

If you’re looking to borrow more cash, remortgaging might still be a better option than taking a personal loan or high rate credit card. If you have equity in your home, you could even look at taking out a second-charge loan.

Can I remortgage if I own my house outright?

Yes, absolutely. This is often referred to as an unencumbered mortgage.

If you want to release some or all of the equity you own in your home it’s perfectly possible to apply for a remortgage, As a homeowner in this fortunate position you should have a choice of provider to get your remortgage with which should lead to you being able to benefit from the best deals around.

Can I remortgage a buy-to-let?

Yes, depending on your circumstances, it should be possible to remortgage your buy-to-let property. Whether you wish to release some equity to fund renovations or to put towards the deposit for your next buy-to-let property, remortgaging should be an option for you.

Can I remortgage to purchase a buy-to-let?

Yes, it’s possible to remortgage your home to release equity to purchase a buy-to-let property.

It’s also possible to switch your residential mortgage to a let to buy mortgage, which allows you to convert your current home into a buy-to-let and arrange a new residential mortgage on a new home.

If you remortgage to buy a second property that you intend to rent out to tenants, or you intend to let your current property with a let to buy mortgage, affordability is based on the rental income the property can achieve, amongst other factors.

I’m an expat. Can I get a remortgage?

If you’re looking to remortgage a property you own in the UK, this is generally easier to arrange than if you want to arrange a new mortgage. If you have an up-to-date UK credit history you should be able to get a competitive deal on your expat remortgage.

If you want to remortgage a property you own in another country, you should anticipate the process being a little less straightforward, but not impossible to achieve. When dealing with property abroad you need to make sure you understand all the tax and legal implications that might arise from a UK citizen owning property abroad.

Can I remortgage a Help to Buy property?

Yes, absolutely. Remortgaging a Help to Buy property isn’t really any different to refinancing a regular mortgage. All of the same criteria and assessments will be the same and your equity loan balance will be carried over.

Speak to a specialist

Whatever the reasons you’re considering arranging a remortgage, we help you access mortgage brokers who can make sure you get the right advice, taking all your circumstances into account.

The mortgage brokers you are introduced to will be happy to answer all your questions and have the tools, experience and know-how to help you get the best available rate on your remortgage deal.

Enquire Now

To be matched to a specialist mortgage broker.

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the brokers we introduce you to, to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All brokers we introduce you to are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.