Monthly mortgage repayments can be a substantial amount of your monthly income, so you should check for better deals from other lenders that will allow you to make lower repayments on better terms.  Now the interest rate starts to ease, most of the mortgage holder wants to save on monthly mortgage payments by finding the best remortgage rates.

Mortgage holders are always asking should I remortgage with same lender or new one ? To know more what is the best for your circumstances speak to remortgage advisor like MariannaFS and they could offer no fee mortgage advice.

In this guide we cover,

What is remortgage
When to remortgage
Remortgage type

What is Remortgaging and How Can It Save You Money?

Remortgaging means switching your existing mortgage deal to the other better deal with same or another lender.

Remortgaging with same lender called product transfer or rate switch.

Most people used to look for remortgage at the end of fixed term for better rate to save money on your mortgage payment.

But with current high interest rates most of borrowers looking at remortgage options before 6 months of their current rate finish.

Why should you remortgage?

Remortgaging is often seen as an effective tool to potentially save money on your monthly mortgage payments, especially if you are on a higher interest rate.

When fixed term is over, your monthly mortgage payment will go up as lender will start to charge you standard variable rate(SVR).

You could save on your monthly mortgage payment by remortgaging to a lower interest rate than SVR.

It is always a good idea to shop around as you may find a much better deal with a different lender than your current lender can offer you.

By remortgaging, you may be able to borrow additional funds from your lender against your property. For example, if you are thinking of home improvements, which can be very expensive you can remortgage to pay for home improvements, or if you think of buying another property remortgage can release equity, which can be used as a deposit for a new purchase or simply pay off your other commitments.

Some major factors that lenders are considering for remortgaging are purpose of the loan, value of the property, applicant’s circumstances and other underwriting factors.

See our Remorgage cost and saving guide.

When is the best time to remortgage?

Most of the fixed term deals are for 2, 3 and 5 years. You can start the process 3 months before the fixed term comes to an end, which allows plenty of time to secure the best mortgage deal and sort out all the paperwork.

But in recent market where interest rates are skyrocketed most of the lenders allow borrowers to secure new mortgage deal 6 months in advance. If the rates come down before the remortgage process completes, you can always request to change to a better rate.

To find the right mortgage deal always speak to a local mortgage broker or find online mortgage broker to find a better deal on remortgage.

How long does it take to remortgage?

Remortgaging process is faster as compared to the original mortgage when you purchase.
In most cases, it could take 4-8 weeks to complete.

An expert mortgage broker can make the process much faster and hassle free till you get the mortgage offer.

But, if you choose to stay with same lender and do a product switch or rate switch, it can be a lot quicker and easier compared to changing the lender. Always seek professional help from remortgage broker like MariannaFS who offer fee free mortgage advice and tell you what’s best option for you.

Some of the common type of Remortgage

1. Remortgage for home improvement.

If you are thinking of home improvement like new kitchen, extension or any other home improvements,  remortgage can help you to raise funds. Home improvements can add value to your property, means it is a better investment for long term.

But do remember, more borrowing means higher monthly repayment. There is always limit on how much you could raise for home improvement, and other factor like income may have impact on borrowing.

It is always a good idea to get professional advice from expert mortgage adviser.

2. Remortgage to buy other property

If you want to buy another property as buy to let, second home, or just want to help family member with their deposit, you can remortgage and raise additional funds.

Buying additional property could be addition to your asset but borrowing more, could increase your monthly payment. Again, borrowing extra depends on many other factors like value of the property and your income.

If you want to buy a property to rent out, you may need buy to let mortgage.

Know more about buy to let mortgages.

3. Remortgage to add or remove someone on mortgage.

If you looking to add or remove someone from mortgage,  you will require to obtain your lender permission.

Your lender will need to know reason of adding or removing someone. The process of adding or removing someone called Transfer of equity. lender will check the income, outgoing and credit worthiness to make a decision, if the loan is still affordable or not.

Most of the time adding and removing from mortgage leads to a remortgage.

Always check with local mortgage broker who may offer free mortgage advice.

4. Remortgage to pay Debt

Raising equity from home to pay off credit card, personal loan or any form of debt is called debt consolidation. The money taken against your home is added to the mortgage which could be less expensive.

Bringing all the debt under one roof to manage payments can be more expensive in the long run.

You may risk to lose your home by securing unsecured debt against your house.

5. Remortgage with bad credit

After getting a mortgage, people often lose track of finances or change in their personal circumstances leading to adverse credit. We been often ask,  “can I remortgage with bad credit?”

Yes, you may still be accepted for a mortgage with a bad credit. Lenders will look at the overall case.

Some lenders do look at the case on merit basis and not on your credit report. Remortgaging with same lender called product transfer does not involve credit check.

It is always a good idea to get a copy of your credit report and get in touch with specialist remortgage broker.

Some of the factors could affect remortgaging.

If your current fix mortgage term coming to an end and if you looking for a better rate, you should consider remortgaging. If you manage to find a better mortgage deal either with the existing or new lender, remortgaging can save you on monthly payments.

If you are planning to remortgage your property, here are some of the factors that could affect your remortgage.

   1 Your mortgage lender

There are two major ways in which you can remortgage your property – by working with the existing lender or by finding a new lender. If you are changing the lender, make sure your case fits with the lender’s lending criteria before making an application.

The mortgage rates in the country have gone through some major highs in recent times. We have seen higher rates in 2023 but luckily, the market is calming down and remortgage rates offered by lenders are changing quite a lot too.

It is, therefore, advisable multiple lenders providing multiple deals. Borrowers often end up assuming that they all provide more or less similar deals. However, every lender is different and has different lending criteria’s and it is important to acknowledge the same.

Make sure you engage with the mortgage broker who can compare correct mortgage deals and your circumstances to helps you to save money.

2  loan-to-value (LTV) ratio

As the name suggests, the loan-to-value ratio is the ratio of the amount you are looking to borrow to the market value of the property.

This is one of the most important factors that decide the nature of the mortgage rates offered by your lender.

The lower the LTV the better the rates are. We have seen 60% LTV remortgage gets the best rates from lenders.

Before you start remortgaging your property, the first thing you should do is determine the current market value of the property. This would give you an idea about how much you can save by remortgaging your property.

3  Early Repayment charges. (ERC)

With the recent higher interest rates,  most of us are worried about remortgaging. Most common query was, can I remortgage before the fixed term ends? Whether you want to remortgage with your existing lender or look for a new lender, always make sure to look out for the early repayment charges, if any, that will be added by the current lender.

If you find the early repayment charges to be unreasonably high, you may want to think twice before remortgaging your property. These charges are very common for borrowers having a fixed-rate mortgage deal.

While there are many more other factors like income, credit history, but these were some of the aspects to consider while remortgaging your property. Especially, if you are remortgaging your very first property and do not have enough experience, avoid making hurried decisions and take help from a remortgage broker.

Some of the FAQS about remortgaging your properties.

Can I remortgage my house?

Yes, you can absolutely remortgage your house at the end of the fixed term. If you are on tracker rate you can switch the rate without paying any early repayment charges. Always get in touch with mortgage broker near you to find out your remortgage options.

Can I remortgage before fixed term ends?

Yes, remortgage before fixed term ends is possible. But you need to know the cost and saving with Remortgage. Your lender may charge you early repayment charges if you remortgage to different lender before current term ends. But remortgaging with same lender may save you from early repayment charges. Always speak to remortgage broker.

My current lender checks credit history while remortgaging?

While remortgaging to same lender does not involve credit check but if you have miss mortgage payment then it may stop you from remortgaging to same lender.

Do I need a solicitor to remortgage?

If you are changing to new lender which requires solicitor to do the legal work of transfer the property called Conveyancing.The work involve is a lot less compared to purchasing property. But remortgage to same lender does not need a solicitor.

How can mortgage broker help to remortgage?

Mortgage broker is experience professional who can compare the right mortgage deal for you.  If you  remortgage with the same lender or change to new lender, your mortgage broker can help you to decide and some of them offer fee free mortgage advice.

How many times of salary mortgage can I get for remortgage?

Most of the lenders are quite lenient if you do a like to like remortgage or called pound to pound remortgage and may lend you more than your income making sure it is affordable. Usually, remortgage for a like to like could get 5 time of your income and in some cases, it goes to 5.5 times of the income. That is subject to normal underwriting.

What ever reason you wants to remortgage it is good idea to seek advice form remortgage broker.

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