Find a great deal today by comparing remortgage rates online with quotes from some of UK mortgage providers with Claim Anything.
What is remortgages?
Remortgages is the process of repaying an existing mortgage debt with a new mortgage. This is typically done to save money with a lower interest rate, or to raise money by borrowing against equity.
Warning: YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Overall representative example:
Based on borrowing
£170,000 over 25 years
2.27% fixed for 2 years (24 instalments of £737.41pm)
The overall cost of comparison
Subsequent rate (SVR)
Total amount payable
4.02% APRC representative
4.31% variable for the remaining 23 years (276 instalments of £913.57pm)
Remortgages – Frequently Asked Questions
Why do people remortgages?
There are many good reasons to look into remortgaging. The two most popular reasons why people choose to remortgage are:
- To save money- in order to lower monthly repayments or benefit from lower interest rates. More than half of all borrowers in the UK are currently paying more than they need to on their mortgage.
- To raise money – to release some of the equity in your home. This could be useful if you wanted to consolidate debts or release money for making home improvements (and adding value to your property). However, there is also the possibility of doing this with your current mortgage lender, with the added benefit of avoiding any penalty fees that come with switching to a new lender.
Many people who already have a mortgage tend to look at remortgage deals and monitor the remortgage market to see if they can get a better deal than they currently have. After the initial fixed rate, your mortgage may revert to a higher rate of interest, meaning you will have to pay more each month. By remortgaging, homeowners may be able to switch to a better deal with a different mortgage provider.
Who can remortgage?
Anyone who has an existing mortgage can look into remortgaging – provided that they meet the criteria set by their potential new mortgage lender. Remortgaging might be particularly important if you’ve come to the end of a fixed-rate period, or your discounted deal is coming to an end. While you can stay with your existing mortgage provider, you will probably be put on their standard variable rate (SVR) which may not be the best deal around. In many cases, remortgaging can make a big impact on your monthly outgoings – for example, if you managed to negotiate down a £75,000, 15 year repayment mortgage from 5.5% to 4% you could save £58 a month.
Can I apply for a remortgage in advance?
Yes, you can get a mortgage offer from a lender before you need it. Some mortgage in principle offers can last for several months.
How long does remortgaging take?
Remortgaging usually takes about a month, as you complete all the paperwork and have a valuation of your home conducted. When the process is complete you’ll be notified with a completion statement from your lender.
Please do bear in mind that remortgaging is very rarely cost‑free – there is often an arrangement fee on a new mortgage, you will need to pay solicitor fees (although some lenders offer free standard legals) and leaving your current provider may mean they charge a cancellation penalty. So check the details of your current deal first.
Which kind of remortgage deal should I choose?
Fixed rate mortgages
If you want to know that your monthly mortgage payments won’t change over time, a fixed rate mortgage is likely to be your best option. Most fixed rate mortgage deals run for between two and five years, although occasionally longer term deals are available.
There will usually be repayment penalties to pay if you want to come out of your fixed mortgage deal early.
Fixed rate mortgages provide valuable peace of mind that your repayments will be the same month after month. But in periods when interest rates are falling, there is a risk you might end up locked into a deal with a relatively high rate of interest when much lower rates are available elsewhere.
Capped rate mortgages
If you prefer a variable rate mortgage, but don’t want the rate to exceed a certain limit, you should consider a capped rate mortgage, where the rate cannot go higher than a certain level, or ‘cap’. This kind of deal ensures that you won’t be hit with unaffordable payments during the capped period. But note that capped rates can often be higher than the equivalent fixed rate.
Discounted mortgages, which offer a discount off a certain interest rate – usually the lender’s standard variable rate – are also variable, so your payments could go up or down over time, but there is no limit on the amount they could rise by. They may therefore be cheaper initially than alternative deals, but your repayments could increase significantly during the term of your deal.
Tracker mortgages are another type of variable rate mortgage, and they usually tracks or follow the Bank of England base rate at a set margin above or below it. The amount you need to repay falls when the base rate drops, but when it rises, your repayments will also increase, which can make budgeting difficult.
Another option you might want to consider is an ‘offset’ mortgage. These work by offsetting your savings against what you owe on your mortgage, therefore reducing the overall amount of interest you pay.
So, if you have a £150,000 mortgage and £30,000 in savings, with an offset you’d only pay interest on the £120,000 difference, enabling you to pay down your mortgage more quickly. However, offset rates tend to be higher than those available on ‘standard’ mortgages, so you’ll need to do your sums carefully to ensure this kind of deal is appropriate for your needs.
And you’d obviously need to lodge your savings with the same institution providing your mortgage!
Do I have to get my house valued when I remortgage?
Yes, lenders usually want to value your home before they offer you a new deal, especially when you switch to them from another mortgage company.
Claim Anything is a credit broker, not a lender to provide this mortgage comparison service. Our services are provided at no cost to you, but we may receive a commission from the companies we refer you to.