If you’re a homeowner in the UK, you may have heard the term “remortgaging” thrown around. Maybe your fixed-rate mortgage deal is ending, or you’re wondering if you could be getting a better deal elsewhere. With interest rates fluctuating and lenders offering various options, securing the best remortgage deal can feel overwhelming.
But don’t worry! In this guide, we’ll break it down for you in a friendly, straightforward way. Whether you’re remortgaging to save money, release equity, or simply move to a better deal, we’ve got you covered.
What is Remortgaging and Why Should You Consider It?
Remortgaging means switching from your current mortgage deal to a new one, either with your existing lender or a new provider. There are several reasons why homeowners remortgage, including:
- Your current deal is ending – Many mortgages come with an initial fixed or discounted rate, typically lasting 2-5 years. Once this ends, you’ll likely move onto your lender’s standard variable rate (SVR), which is often higher.
- You want to save money – If mortgage rates have dropped since you took out your loan, or your circumstances have improved, a better deal could lower your monthly payments.
- You need to release equity – If your home’s value has increased, you could borrow more money against it for home improvements, paying off debts, or other financial needs.
- You want a more suitable mortgage – Maybe you’re looking for a fixed-rate deal for stability or a more flexible product to suit your changing financial situation.
With that in mind, let’s look at how you can secure the best remortgage deal in today’s market.
1. Start Looking Early
Most lenders let you secure a remortgage deal up to six months before your current deal ends. This means you can lock in a new rate while still on your existing deal, avoiding any sudden jumps to the higher SVR.
Tip: Set a reminder 4-6 months before your deal expires so you have plenty of time to research, compare rates, and apply without feeling rushed.
2. Check Your Credit Score
A strong credit score increases your chances of getting the best mortgage rates. Lenders use this score to assess how reliable you are in repaying debt.
To boost your score:
✅ Check your credit report on sites like Experian, Equifax, or TransUnion.
✅ Make sure you’re on the electoral roll.
✅ Pay off any outstanding debts or reduce your credit card balances.
✅ Avoid applying for new credit (loans, credit cards) just before remortgaging.
A small improvement in your score could mean access to a lower interest rate, saving you money in the long run!
3. Work Out Your Loan-to-Value (LTV) Ratio
Your loan-to-value (LTV) ratio is the percentage of your home’s value that you’re borrowing. For example, if your home is worth £300,000 and your mortgage balance is £180,000, your LTV is 60%.
Lenders offer better interest rates to those with lower LTVs, as they’re seen as lower risk. If your property has increased in value, or you’ve paid off a good chunk of your mortgage, you might be eligible for a much better rate.
💡 Tip: Use an online mortgage calculator to check your LTV and see what deals you might qualify for.
4. Shop Around and Compare Lenders
While it may be tempting to stick with your current lender, you could find a better deal elsewhere. Comparing different lenders can help you secure a more competitive rate.
- Check mortgage comparison sites like MoneySuperMarket, Compare the Market, or Which?
- Speak to a mortgage broker – They can access exclusive deals and recommend the best options for your situation.
- Ask your current lender if they can offer a better rate to keep your business.
5. Factor in Fees and Hidden Costs
It’s easy to focus on the interest rate, but don’t forget about the fees! Some remortgage deals come with additional costs that can eat into your savings.
Key fees to check:
💷 Arrangement fee – Charged by the lender to set up your new mortgage.
💷 Valuation fee – Some lenders charge this to assess your property’s value.
💷 Exit or early repayment fees – If you’re leaving your current deal early, there may be penalties.
💷 Legal fees – Required when switching to a new lender (though some deals cover this for free!).
💡 Tip: Always calculate the total cost of the new mortgage, not just the monthly payment. A deal with lower fees might be better overall, even if the interest rate is slightly higher.
6. Consider Fixing Your Rate (or Going Variable!)
One of the biggest decisions in remortgaging is choosing between a fixed or variable rate mortgage.
✔ Fixed-rate mortgage – Your interest rate stays the same for a set period (usually 2, 5, or 10 years). This gives you peace of mind with predictable payments, especially if interest rates rise.
✔ Variable-rate mortgage – Your rate can change based on the Bank of England base rate or your lender’s discretion. This could mean lower payments when rates fall, but also the risk of increases.
🚀 Top Tip: If you like financial stability, a fixed-rate mortgage might be the safest bet. But if you can afford some fluctuation, a variable-rate deal could save you money.
7. Don’t Leave it Too Late!
If you don’t remortgage before your deal expires, you’ll automatically be switched to your lender’s Standard Variable Rate (SVR), which is often much higher.
Example: If your fixed-rate mortgage at 2.5% expires and your lender’s SVR is 6%, your monthly payment could increase dramatically!
Avoid this by starting the remortgage process well in advance.
8. Seek Professional Advice
Even if you feel confident shopping around, speaking to a mortgage broker can be a game-changer. They:
✔ Know the best deals available and can access exclusive rates.
✔ Handle the paperwork, making the process smoother.
✔ Help if you have complex circumstances, like being self-employed or having a lower credit score.
Many brokers offer fee-free services, getting paid by lenders instead. Always check their terms before proceeding.
Final Thoughts: Is Remortgaging Worth It?
If you can secure a lower interest rate, reduce your monthly payments, or find a mortgage better suited to your needs, remortgaging is absolutely worth considering.
However, it’s important to do your research, compare deals, and check for any hidden costs before making a decision.
💡 Key Takeaways:
✅ Start looking 4-6 months before your deal ends.
✅ Check your credit score and improve it if needed.
✅ Calculate your LTV to see what rates you qualify for.
✅ Compare different lenders and consider using a mortgage broker.
✅ Don’t forget about fees and extra costs.
✅ Decide whether a fixed or variable rate suits you best.
✅ Avoid rolling onto your lender’s SVR by acting early.
By following these steps, you’ll put yourself in the best position to secure a great remortgage deal and save money in the long run.
Thinking about remortgaging? Speak to a mortgage expert today to find out what options are available to you! 🚀