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Understanding Remortgaging
What is Remortgaging?
- Switching to a new mortgage deal
- Can be with same or different lender
- Usually done for better interest rates
- May involve releasing equity
- Common at end of fixed-rate periods
When to Remortgage
- Fixed rate deal coming to an end
- Interest rates have fallen significantly
- Your credit score has improved
- Property value has increased
- Need to raise additional funds
Costs Involved
- Arrangement or product fees
- Valuation fees (£150-£1,500)
- Legal fees (£300-£1,500)
- Early repayment charges (if applicable)
- Broker fees (if using one)
Top Tips
- Start looking 4-6 months before deal ends
- Compare total cost, not just interest rates
- Consider future flexibility needs
- Check for cashback offers
- Factor in all fees in your calculations
Frequently Asked Questions
Essential information about remortgaging in the UK
When is the best time to remortgage in the UK?
The best time to remortgage is typically 3-6 months before your current deal ends, when you're moving to your lender's standard variable rate, or when market rates have dropped significantly. This gives you time to find the best deals and complete the process without rushing. Also consider remortgaging if your property has increased in value or your credit score has improved.
What are the typical costs of remortgaging?
Remortgaging costs typically include arrangement fees (£0-£2,000), valuation fees (£150-£1,500), legal fees (£300-£1,500), and potentially early repayment charges if you're leaving your current deal early. Some lenders offer free valuations and legal work. Always factor these costs into your savings calculations to ensure remortgaging is worthwhile.
How long does the remortgage process take?
The remortgage process typically takes 4-8 weeks from application to completion. This includes time for application processing, property valuation, legal work, and final approval. Starting early is crucial - begin looking for deals 3-6 months before your current rate expires to avoid being moved to your lender's higher standard variable rate.
Can I remortgage if I have bad credit?
Yes, but your options may be limited and rates may be higher. Specialist lenders offer products for those with poor credit, but you'll typically face higher interest rates and fees. To improve your chances, work on improving your credit score, reduce existing debts, and consider using a mortgage broker who knows which lenders are more flexible with credit issues.
Should I use a mortgage broker for remortgaging?
A mortgage broker can save you time and potentially money by comparing deals across multiple lenders, including exclusive products not available directly. They can be particularly helpful if you have complex circumstances or credit issues. However, consider their fees - some charge around £500-£1,000, while others are paid by lenders. Compare both broker and direct-to-lender options.