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Remortgages

Compare remortgage deals

  • Compare remortgage deals
  • See home loans relevant to you
  • Take the stress out of remortgaging

Compare mortgages from over 90 lenders, covering the whole of the market

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Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.

 

What does remortgaging mean?

 

A remortgage is a change of the mortgage deal on your property, either by switching it to a new lender, or by moving to a different rate with your existing lender. It can be a good way to find lower interest rates and better mortgage terms. 

first time buyers

Why might I want to remortgage my home?

There are a number of reasons you might want to remortgage your home, including:

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    Your current deal is about to expire

     When your current mortgage deal ends, you’ll be put on your provider’s SVR, which tends to be higher. Remortgaging can move you on to a lower interest rate 

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    You're on a high interest rate:

    If you’re on a variable rate mortgage, a rise in the Bank of England base rate can increase your mortgage payments. If you remortgage you could find a more competitive dea

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    Equity Release

    You can release equity from your property when you remortgage to pay for home improvements or paying off other debts 
     

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    Mortgage overpayments

    You may want to remortgage to find a provider with more flexible terms that lets you overpay on your mortgage without penalty

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    Increased property value

    If your property value has increased, your lower loan-to-value might help you qualify for better interest rates

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    Offsetting savings

    If you have built up some cash savings, or perhaps had an inheritance or windfall, you can use this money to offset against your mortgage debt with an offset deal

How can I get the best remortgage deal?

The best remortgage deal will depend on a number of factors including your individual financial circumstances. These are some of the things to consider:

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    Improve your credit rating

    Having a good credit score will allow you to get the best advertised rates from mortgage lenders

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    Seek out low interest rates

    Compare deals by the lowest rate. Consider fixed and tracker deals to see which might suit your attitude to risk

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    Reduce your loan-to-value (LTV)

    If you can borrow a lower percentage of the property’s value, you can often find cheaper remortgage deals

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    Look for low fees

    Administration, legal and valuation fees on a remortgage can offset a low interest rate – so a deal is not as good as it first appears

How can I work out how much a remortgage will cost?

How much a remortgage costs depends on the amount you need to borrow, the type of mortgage – repayment or interest-only, for example – the interest rate you agree to pay, how many years the loan is spread over (known as the term of the loan) and the fees you are charged when setting it up.

Our mortgage calculator can help you get a better idea of how much your mortgage will cost you in monthly repayments, as well as how much you can afford to borrow . You’ll also be able to see the total cost of your mortgage once the interest has been added.  

 

 

 

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Can I remortgage with bad credit?

You may be able to remortgage if you have a poor credit rating, but it’s unlikely you’ll be able to get the best rates available from a lender.

Get hold of a free copy of your credit file and see if there are any ways you could improve your credit rating.

When you compare deals through MoneySuperMarket we can show you the mortgages you're likely to be eligible for without it harming your credit score. This is because we can perform a ‘soft search’ on your credit file when searching for new mortgage deals with lenders.

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How to remortgage with MoneySuperMarket

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It doesn’t take long

You can easily compare deals from our panel of leading lenders before making your final decision.

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We’ll ask you some quick questions

This will help us find the most relevant deals for you including only products you are likely to be accepted for 

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We’ll show you a list of deals

These will show your potential monthly repayments, the interest rate you’ll pay and the cost of any product fees.

While it is useful to keep tabs on your mortgage to see if there are cheaper alternatives, the best time to focus on remortgaging is around three to six months before your current deal is about to expire.. 

This gives you time to find a better deal and make sure you have it in place to avoid reverting to your existing lender’s SVR and paying more in repayments than you need. Lenders will also issue remortgage offers that last from three to six months, so unless your financial situation changes, any offer you receive during this period should stay valid until your current deal concludes.

Although early repayment charges often mean it’s too expensive to remortgage before your current deal ends, you could face a situation where you’re better off or need to remortgage anyway. 

These include the value of any new deal wiping out the early repayment fees, seeing interest rates surge and needing to find a way to reduce monthly repayments, or simply needing additional borrowing for reasons such as paying for home renovations. 

Typically, around four to eight weeks from application, but this will depend on a number of factors such as whether you are looking for a like-for-like deal or if you want to increase the amount you borrow. If you are just looking for a better deal for your existing property and your affordability hasn’t changed – or has improved – you are well place for the deal to progress quickly.

Yes, but it will depend on the terms and conditions of your existing mortgage – and may work out expensive. Many mortgages have an early repayment charge , which can mean it’s cost prohibitive to remortgage before the end of the introductory period. But even if you’re locked into a deal, you don’t have to wait before looking at alternatives. From three to six months before the deal expires, you can have a remortgage in place ready to go.

You don’t have to use a solicitor, but it can take the worry out of making sure that the deeds of the mortgage are safely transferred to the new lender. Fortunately, most remortgages include a free legal package so your lender will take on the cost of the solicitor. Remortgaging is also generally more straightforward than a new mortgage so any costs incurred should be lower.

Remortgaging to release equity means borrowing more than with your existing mortgage. If you’re nearing the end of your current deal, you could look to remortgage for a larger amount, but this will depend on your affordability and what percentage of the property’s value you are looking to borrow. If you can’t or don’t want to change your initial mortgage, alternatives include taking out a second mortgage on the property.

Remortgaging happens when you change the mortgage you currently have on your property, either by switching it to a new lender, or by moving to a different deal with your existing lender.

Remortgaging happens when you change the mortgage you currently have on your property, either by switching it to a new lender, or by moving to a different deal with your existing lender.

The main cost of your remortgage will be decided by the interest rate your lender sets. They’ll usually decide this by considering the following factors:

  • Your loan to value

  • Your credit history

You should always factor in the fees you’ll need to pay before remortgaging, which can include:

  • Arrangement fees: Most mortgages have arrangement fees which range from around £100 up to a couple of thousand pounds. Mortgage deals with the keenest rates tend to have the highest fee

  • Legal fees: You might have to pay for a solicitor to take care of any legal matters if you’re looking to remortgage with a different lender

  • Admin fees: The lender might charge for the cost of setting up your remortgage 

  • Valuation: You’ll need to have your property valued so the lender can see its current market value – to check the loan to value ratio of the mortgage is correct

Your lender will ask you to gather a few documents to complete a remortgage. These might include:

  • Your last three months' bank statement

  • Your last three months' pay slips

  • Your last two to three years' accounts/tax returns if self-employed 

  • Your latest P60 tax form (showing income and tax paid from each tax year)

  • Passport or driving licence

  • Proof of address, through utility/council tax bills

You’ll likely find the same options as if you were taking out a first mortgage when remortgaging. The most common remortgage deals include:

Remortgaging with a fixed rate deal

A fixed rate mortgage is when the interest rate stays the same for a set amount of time. This can be a good option if you want peace of mind that your repayments will stay the same each month. Most fixed rate deals run for between two and five years, although some are longer.

Fixed rate mortgages are the most popular mortgage type for people looking to remortgage, according to MoneySuperMarket mortgage comparison quote searches from January 2016 – July 2018.

Remortgaging with a tracker deal

Tracker mortgages have variable rates that track the Bank of England base rate at a set percentage above or below it.

If the Bank of England’s base rate rises or falls, the interest you pay on your monthly mortgage repayments will do the same. This can be good when rates are falling, but you’ll need to be sure you could afford your repayments if rates went up.

70% of consumers looking for a tracker mortgage are remortgaging, according to MoneySuperMarket data January 2016 – July 2018.

 94% of people looking to remortgage are looking for a fixed rate mortgage
 Types of tracker mortgage

Other mortgage types to consider

Other mortgage types you might want to consider if you’re looking to remortgage include:

  • Capped rate mortgage: a capped rate mortgage is a variable rate mortgage, but there is a limit to how high the rate can go. This can be useful if you want a variable rate mortgage, but also want to avoid unaffordable payments if the rate rises.
  • Discounted mortgage: a discounted mortgage is another type of variable rate mortgage which offers a discounted rate on the lender’s SVR for a certain period of time.
  • Offset mortgage: an offset mortgage helps to reduce the overall interest you pay by offsetting your savings against the outstanding balance of your mortgage. But this does mean you won’t be gaining any interest on your savings during the deal.

Fixed rate mortgages have an interest rate that stays the same for a set period. This could be anything from two to 10 years. Your repayments are the same every month and you don't need to fear fluctuations in interest rates. Most will charge you a penalty - known as an early repayment charge (ERC) - if you choose to leave the deal before the end of the fixed term.

Interest rates adjust periodically with a variable rate mortgage, which means repayments may change throughout the loan term. Usually, the interest rate changes in relation to another rate - the Bank of England's base rate is very influential on variable interest rates, as is the base rate of each lender.

For standard variable rate (SVR) mortgages, each lender has an SVR that they can move when they like. In reality, this tends to roughly follow the Bank of England's base rate movements. SVRs can be anything from two to five percentage points above the base rate – or higher – and they can vary massively between lenders.

The other type of variable mortgage is a discount mortgage. Rather than being linked to the Bank of England base rate, discounts are linked to the lender's standard variable rate (SVR). For example, if the SVR is 4.50% with a discount of 1%, the payable mortgage rate is 3.50%. If the SVR rose to 5.50%, the pay rate would rise to 4.50%.

The problem with discounts is that SVR changes are at the lender's discretion so your mortgage payments could change even if there has been no alteration in the Bank of England base rate. What's more, even if the SVR changes following a move in the base rate, there is no guarantee that it will increase or decrease by the same amount.

As a result, trackers are usually seen as more transparent than discounted deals and are often seen as being fairer for the borrower.

When the base rate fell from 5.00% to 0.50% between October 2008 and March 2009, for example, Lloyds TSB was the only top 20 lender to reduce its SVR by the full 4.50%. All the others cut their rates by less.

When the Bank of England raised the base rate from 0.25% to 0.5% in November 2017, anyone who wasn’t on a fixed rate mortgage was at risk of seeing their repayments increase. A number of leading mortgage lenders followed and increased their tracker and/or SVR rates a month later.

Most mortgage deals carry arrangement fees, which can vary from a few hundred pounds up to a couple of thousand.

Also bear in mind that these set up costs can sometimes be made up of two fees. Lenders may charge a non-refundable booking fee, which is effectively a product reservation fee. If your remortgage falls through and you don’t end up taking the mortgage deal, you won’t get this fee back.

The second type of fee is an arrangement fee which you pay on completion of the mortgage, so you won't have to pay it if, for any reason, you don't take the mortgage.

Calculate how early you could pay off your mortgage. But make sure you read our mortgage overpayment guide first, as overpaying isn’t the right move for all homeowners.

Mortgage overpayment calculator

Remember to always factor these into the overall cost of any deal. Even if a lender is offering a seemingly unbeatable rate, steep fees could mean that it actually works out to be more cost-effective to opt for a higher rate, but with a much lower fee, or no fee at all.

The best remortgage rate for you depends on how much you are looking to borrow. A high fee is often worth paying in order to secure a low interest rate if you are applying for a large mortgage. But those with smaller mortgages could be better off opting for a higher rate and lower fee.

However, while this is the general rule, it is worth crunching the numbers when you are comparing mortgages – you need to work out the total cost over the term of the deal. For example, if you are going for a two-year fix you need to work out the cost of your repayments over the term. You can do this by finding out what the monthly payment will be using our mortgage calculator – and then multiply by 24. You then need to add on the arrangement fee to find out the total cost.

You will likely find that you have more mortgage deals available to choose from if you have a good credit history, so it’s worth making sure that your credit report is as good as it can be before applying for a remortgage. Steps like paying off any outstanding borrowed credit you owe and making sure your current address is on the electoral role can help to improve your credit score.

The more money you can save as a deposit, the less you’ll need to borrow as a mortgage loan – and having a bigger deposit can help you get access to more competitive mortgage rates. Lenders will often have a maximum loan to value they’re prepared to offer you, and the rest will need to be made up with either a deposit or an equity loan like the government’s Help to Buy equity loan scheme.

Using a mortgage comparison tool can help to give you a better idea of how much you’d need to pay in monthly costs and interest, the duration of the deal, the maximum LTV and any product fees you may need to pay for the remortgage deals available based on your borrowing requirements. It’s important to remember though that the actual mortgage deals you’re offered when you go to make an application may differ because they will then be influenced by your financial situation and credit history.

Get free mortgage advice, and see deals from the whole of the market, with broker London & Country. Call free from your landline or mobile on 0800 170 1943 any day. Read more about London & Country

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