Looking to remortgage?

A remortgage may be a way to reduce your monthly payments or to access extra money to help with other costs.

The reason remortgages are popular is you can normally get a lower interest rate and a better all-round deal, by going to a new lender rather than staying with your existing provider (depending on your circumstances).

When weighing up whether to remortgage, you need to consider money, timing and your personal circumstances, as well as the following scenarios:

• If you have a very high early repayment charge and it would be cheaper to wait until the end of the incentive period
• If you have a very low level of equity in your current property, you may find it difficult to get an improved mortgage deal

The cost of remortgaging can vary depending on several factors, including the value of your property, the amount of your new mortgage, and any fees associated with the new lender.

Some common fees include valuation fees, legal fees, and arrangement fees. It’s important to factor these costs into your decision to remortgage.

Here are some common costs associated with remortgaging:

1. Early repayment charges (ERCs): If you’re currently on a fixed-rate mortgage or have a mortgage deal with early repayment penalties, you may need to pay ERCs to exit your current mortgage early. The charges typically range from 1% to 5% of the outstanding mortgage balance.
2. Mortgage arrangement fee: When you remortgage, you may be required to pay a fee to the new lender for arranging the mortgage. This fee can vary significantly and may be a flat fee or a percentage of the loan amount. It’s important to compare different lenders to find the best deal.
3. Valuation fee: The new lender will usually require a valuation of the property to determine its current market value. They may charge a valuation fee for this service, which can range from £150 to £500, depending on the property value. In most cases, valuation is free of charge.
4. Legal fees: You’ll need a solicitor or conveyancer to handle the legal aspects of the remortgage process. The legal fees can vary, but they typically range from £500 to £1,500, depending on the complexity of the transaction. Some lenders offer free solicitor services.
5. Mortgage broker fees: If you use a mortgage broker to help you find a suitable remortgage deal, they may charge a fee for their services. At Mortgage Decisions charge £595 on the offer of the mortgage or we can charge up to 1% of the loan if it’s a specialist case.

The loan to value (LTV) rate of your property can have an impact on your ability to remortgage, as well as the interest rate you may be offered. LTV is the percentage of your property’s value that you are borrowing with your mortgage.

Generally, the higher your LTV, the higher your interest rate may be. It’s important to keep your LTV as low as possible in order to secure the best remortgage deal.

The amount you can borrow for a remortgage will depend on several factors, including your income, credit score, and the value of your property. You can use our online mortgage calculator or speak to one of our mortgage advisors to get an estimate of how much you could borrow.

If you need to borrow more money than your current mortgage, you may be able to do so through a remortgage. This will depend on the lender’s criteria and your ability to afford the increased repayments.

At the end of your mortgage deal, you will typically revert to the lender’s standard variable rate (SVR), which may have a higher interest rate. You can either choose to continue paying the SVR or remortgage to a new deal to get a better rate.

If you want to move home during your mortgage deal, you will need to check if your mortgage is portable. If it is, you may be able to transfer your mortgage to your new property, although you will still need to meet the lender’s affordability and credit checks. If your mortgage is not portable, you may need to pay an early repayment charge to leave your current deal early.

If you are remortgaging to a new lender then yes you will need an Agreement in Principal (AIP) with the prospective new lender. If you are staying with your existing lender and completing a product switch then a new Agreement in Principal (AIP) would not be required. An AIP is typically used when applying for a new mortgage, to show that you have the lender’s initial approval for a certain amount.

It may be more difficult to remortgage with bad credit, but it is still possible. You may need to work with a specialist lender who offers mortgages to those with poor credit histories, and the interest rates may be higher as a result.

It is important to check your credit report and address any issues before applying for a remortgage, as this can improve your chances of being approved and getting a better deal.

The length of time it takes to remortgage your home can vary depending on several factors such as the complexity of your application, the lender’s processing times. Typically, the process can take between four and eight weeks, but some lenders may offer a faster turnaround and completion time.

Yes, you can remortgage early, but you may be subject to early repayment charges if you are still in a fixed rate period. It’s important to check your current mortgage agreement to see if there are any penalties for early repayment.

Yes, you can remortgage with a different lender. In fact, switching to a different lender is often the best way to find the most competitive remortgage deals.

Before you decide, it’s important to compare rates and fees from different lenders to ensure you are getting the right deal for your needs.

Yes, you can remortgage if you’re self-employed. However, the application process may be slightly different than if you were employed. You’ll need to provide additional documentation to prove your income, such as tax returns, business accounts, or bank statements.

Yes, you’ll need a solicitor or conveyancer when remortgaging to handle the legal work and transfer of funds. They’ll ensure that the new mortgage is registered with the Land Registry and that the funds are released to pay off the old mortgage. Many lenders who you a remortgaging to will often pay for the legal costs of moving across to them.

Yes, you’ll need to get your house valued when remortgaging, but the process is usually less involved than when you bought your property. The lender will typically conduct a basic valuation or an automated valuation to ensure that the property is adequate security for the amount you want to borrow and to determine the loan-to-value.

To remortgage to release equity, you would need to apply for a new mortgage that is greater than the amount you currently owe on your property. The difference between the two amounts is the equity you would release. This can be used to fund home improvements, pay off debts, or for other expenses.

When remortgaging, you will need to provide various pieces of information and documentation to support your application, such as your income and employment details, proof of identity, bank statements, and details of your current mortgage.

Generally, there is no specific age limit for remortgaging. However, lenders may have their own criteria for lending to older borrowers, such as requiring proof of retirement income. It’s important to research and compare different lenders and their requirements to find a remortgage deal that suits your needs.

Contrary to popular belief, you do not need to take out life insurance to get a mortgage.

One of the main reasons why people take out life insurance is to ensure that their families can carry on paying the mortgage, in the event of your death. The consequences of not being able to pay your mortgage could end in your family being forced to sell their home and move out.

The only insurance you need as a legal requirement when getting a mortgage is buildings insurance.

Buildings insurance covers your home against any damage that may need to be repaired. This type of insurance only applies to the structural aspects of your home i.e. the walls, roof, floors, fixtures and fittings etc.—not the actual contents of it.

However, there are lots of other types of insurance that will benefit you and your family’s future. Mortgage insurance covers the cost of your mortgage if you become unwell or unable to pay the bills and similar to life insurance, it offers a level of security against the worst. Contents insurance is another good one to consider when buying a home, protecting your belongings within the house from theft or natural damage.