Remortgaging Explained

When to review your mortgage

Start reviewing several months before a fixed or discounted deal ends. This creates time to compare a new deal with your current lender’s product-transfer options.

Leaving it too late can reduce your options and create unnecessary pressure. A remortgage is usually easier to compare well when there is enough time to review rates, fees, early repayment charge dates, documentation and any changes in your circumstances.

A good review window also helps if the case turns out to be more complex than expected. Self-employed income, changes in employment, a different property value or tighter lender criteria can all mean extra work is needed before the best route becomes clear.

Compare the total cost

A lower rate is not automatically cheaper. Product fees, valuation costs, legal charges and early repayment charges can outweigh a modest monthly saving.

This is one of the most common remortgage mistakes. Borrowers often focus on the headline interest rate and monthly payment, but the real comparison should include the total cost over the period you expect to keep the new deal.

In some cases a slightly higher rate with lower fees can work out better than the cheapest-looking rate. In others, a product fee may still be worth paying because the payment saving is large enough to justify it over time.

• Compare costs over the period you expect to keep the deal
• Check whether fees are paid upfront or added to the loan
• Consider how your loan-to-value may have changed

Understand your current lender options as well

Remortgaging does not always mean changing lender. A product transfer with your current lender can sometimes be simpler, quicker or lower cost because fewer checks may be required. But simpler does not automatically mean better value.

The useful comparison is usually between three things: staying on the existing lender’s new deal, moving to a different lender, and doing nothing and reverting to the lender’s reversion rate. Seeing those side by side makes the decision clearer.

Prepare to apply

Lenders typically reassess income, expenditure, credit history and the property. Gather recent evidence of income and bank statements, and avoid assuming an existing mortgage guarantees acceptance elsewhere.

Even if you have managed the mortgage well for years, a new lender still looks at the case through its current lending policy. That means affordability, credit profile, property details and supporting documents all matter again.

It is also worth checking whether anything in your circumstances has changed since the original mortgage that could affect the outcome, such as income structure, employment pattern, new credit commitments or changes to the property itself.

Loan-to-value can change the picture

If your property value has risen or the mortgage balance has reduced, your loan-to-value may be lower than when you first took the deal. That can sometimes improve product access and pricing.

The reverse is also important. If the property value is weaker than expected, the deal options available may be narrower. That is why assumptions about value should be checked carefully rather than taken for granted.

Know the timing of early repayment charges

The end date of any early repayment charge is critical. Remortgaging too early can wipe out the benefit of a better new deal if a significant charge still applies.

In some cases it may still be worth moving before the charge ends, but only after comparing the full numbers. The point is to make the decision deliberately rather than accidentally overlapping with avoidable costs.

A practical remortgage process

Start by checking your current balance, current deal end date, any early repayment charges and your estimated property value. Then compare realistic options over a relevant period, including the lender you are already with.

If a switch still looks worthwhile, gather your documents early and review whether your circumstances are likely to fit the lenders you are considering. That process usually leads to a more confident remortgage decision than reacting only to headline rates.