Remortgaging is one of the most common financial transactions in the UK. Around 800,000 mortgage holders remortgage every year, and for good reason — switching to a new deal at the right time can save you hundreds of pounds a month. Yet many homeowners simply let their fixed rate expire and drift onto their lender's standard variable rate, paying far more than they need to.
What Is Remortgaging?
Remortgaging means switching your existing mortgage to a new deal — either with your current lender or a different one. Your home does not change, and you are not moving house. You are simply replacing your current mortgage arrangement with a new one, usually to get a lower interest rate, release equity, or change the terms of your mortgage. The new lender pays off your old mortgage and you begin making payments to them instead.
When to Remortgage
The most common trigger for remortgaging is the end of a fixed-rate or introductory deal. When your fixed period ends, you are automatically moved onto your lender's standard variable rate (SVR), which is typically 2–3 percentage points higher. This can mean a significant increase in your monthly payments for no benefit.
Other common reasons to remortgage include:
- Releasing equity: Borrowing more than your remaining balance to access cash tied up in your home.
- Home improvements: Funding renovations or extensions by borrowing against increased property value.
- Debt consolidation: Rolling higher-interest debts into your mortgage to reduce monthly outgoings (though you pay interest over a longer period).
- Rate environment changing: Locking into a fixed rate before anticipated interest rate rises, or switching from a fix to take advantage of falling rates.
- Changing mortgage type: Moving from interest-only to repayment, or adjusting your mortgage term.
The Remortgage Process
Remortgaging is more straightforward than buying a property. You can typically start the process up to six months before your current deal ends, which gives you time to secure a rate and complete the switch without a gap. The process generally follows these steps:
- Research and comparison: Compare deals across the market, considering rates, fees, and total cost over the deal period.
- Application: Apply to the new lender with details of your income, outgoings, and property.
- Valuation: The new lender will value your property — this is often free on remortgage deals.
- Legal work: A solicitor handles the transfer of the mortgage. Many lenders offer free legal work as part of their remortgage package.
- Completion: The new lender pays off your old mortgage. The whole process typically takes 4–8 weeks.
Costs of Remortgaging
Remortgaging is not free, and all costs need to be factored in to determine whether switching saves money overall.
Typical Remortgage Costs
| Cost | Typical Amount | Notes |
|---|---|---|
| Early Repayment Charge (ERC) | 1–5% of balance | Only if leaving during fixed/deal period |
| Valuation fee | £0–£350 | Often free on remortgage deals |
| Legal fees | £0–£500 | Often free with lender packages |
| Product/arrangement fee | £0–£2,000 | Can be added to loan (but you pay interest on it) |
| Broker fee | £0–£500+ | Some brokers are fee-free (paid by lender) |
Early repayment charges are the biggest potential cost. Check your current mortgage offer document or contact your lender to find out your ERC before committing to a remortgage.
Product Transfer vs Remortgage
A product transfer means switching to a new deal with your existing lender, rather than moving to a different lender entirely. Product transfers are simpler and faster — there is usually no valuation, no legal work, and no affordability check. Your lender will typically contact you as your deal approaches its end to offer you their available rates.
However, your current lender's deals may not be the most competitive on the market. By only considering a product transfer, you could miss out on better rates elsewhere. A product transfer makes most sense when the saving from switching lenders is small and would be eaten up by fees, or when your circumstances have changed in a way that might make passing a new lender's affordability checks difficult.
How Much Could You Save?
The potential savings from remortgaging can be substantial, particularly if you are on or about to move onto a standard variable rate.
Example: Remortgage Savings on a £200,000 Mortgage (25-year term)
- SVR at 6.5%
- £1,350/month
- Fixed rate at 4.5%
- £1,111/month
- Monthly saving
- £239/month
- Annual saving
- £2,868/year
Illustrative example only. Actual savings depend on your outstanding balance, remaining term, current rate, and available deals. Use our mortgage calculator to estimate your own figures.
Remortgaging to Release Equity
If your property has increased in value since you bought it, or you have paid down a significant portion of your mortgage, you may be able to remortgage for more than your outstanding balance and take the difference as cash. This is known as releasing equity or capital raising.
Common uses for released equity include funding home improvements, helping children or grandchildren with a deposit to buy their own home, and consolidating higher-interest debts. The amount you can release is limited by the lender's maximum loan-to-value (LTV) ratio — most lenders will not lend above 85–90% LTV on a remortgage with capital raising.
Any money released is borrowed money. Interest is payable on it for the remaining term of the mortgage, so the total cost of borrowing can be significant. For larger amounts, the cost of equity release can be compared against other borrowing options such as personal loans or further advance products.
Using a Mortgage Broker
A whole-of-market mortgage broker can search across the entire lending market on your behalf, including deals that are not available directly to consumers. They handle the paperwork, liaise with lenders and solicitors, and guide you through the process from start to finish.
A broker is particularly valuable if you are self-employed (as lender criteria vary significantly), have a complex income structure, are remortgaging with a small deposit or high LTV, or want to release equity. Some brokers charge a fee while others are paid by commission from the lender — either model can work, but understanding how the broker is paid is part of the comparison. See our guide on first-time buyer mortgages for more on working with a broker.
When NOT to Remortgage
Remortgaging is not always the right move. There are several situations where staying put or choosing a product transfer makes more sense:
- Early repayment charges exceed savings: If leaving your current deal would trigger ERCs that outweigh the benefit of switching, it is usually better to wait until the deal period ends.
- Small remaining balance: With a very small mortgage (under £50,000), the fees involved in remortgaging may not be justified by the savings.
- Close to paying off: If you only have a few years left on your mortgage, the cost and effort of switching may outweigh the benefits.
- Negative equity: If your property is worth less than your outstanding mortgage, most lenders will not offer you a remortgage. A product transfer with your existing lender may be your only option.
You can estimate your potential savings using our mortgage calculator, and use the stamp duty calculator if you are considering buying a new property instead.
This guide is for general information only and does not constitute financial advice. The information is based on publicly available data from the FCA, HMRC, and other government sources. Always seek professional advice before making financial decisions. Figures and thresholds are subject to change — check official sources for the latest values.