Remortgage
A remortgage is more than a search for a new rate.
It is a point where your mortgage, income, property value and plans are reviewed together. A lower rate may be important, but the right decision also depends on fees, early repayment charges, affordability, loan-to-value, product type and how long you expect to stay in the property.
Connect Lifetime can help homeowners review their remortgage options before their current deal ends, when they want to borrow more, or when their circumstances have changed.
What is a Remortgage?
A remortgage means replacing your existing mortgage with a new mortgage on the same property.
You are not moving home. Instead, the mortgage secured against your current home is reviewed and replaced. This may be with your existing lender through a product transfer, or with a different lender through a full remortgage.
A remortgage may be considered when:
- Your current mortgage deal is ending
- You want to avoid moving onto a standard variable rate
- You want to compare fixed, tracker or variable options
- Your home value has changed
- Your income or employment has changed
- You want to borrow more against your home
- You want to change the mortgage term
- You want to review your monthly payments
- You want to check whether your current lender is still suitable
A remortgage does not automatically mean a better outcome. The new deal must be judged against the cost of changing, not just the interest rate.
For wider mortgage support, read our residential mortgage advice page.
When Should You Review Your Mortgage?
It is usually sensible to review your mortgage several months before your current deal ends.
This gives you time to compare options before your lender moves you onto its standard variable rate. It also gives you time to check your credit file, income documents, property value and affordability position.
A rushed remortgage can lead to a poor decision. A careful review can show whether it is better to stay with your existing lender, move to a new lender, change your mortgage term, borrow more, or wait.
You may want to start reviewing your mortgage if:
- Your fixed rate ends within the next few months
- Your monthly payment is due to rise
- Your property value may have increased
- Your income has changed
- You are now self-employed
- You have new credit commitments
- You want to fund home improvements
- You are considering debt consolidation
- You want more payment certainty
You can use our mortgage calculator to estimate possible monthly payments before speaking with an adviser.
Remortgage or Product Transfer?
A remortgage and a product transfer are not the same.
A remortgage usually means replacing your current mortgage with a new mortgage. This may involve moving to a different lender. The new mortgage pays off the existing mortgage.
A product transfer means staying with your current lender and switching to a different deal with the same lender.
A product transfer may be quicker because it can involve fewer checks. It may also avoid legal work in some cases. However, it may not always provide the most suitable rate, term or borrowing structure.
A remortgage may provide access to a wider range of lenders, but it can involve a new application, valuation, legal work, and an affordability assessment.
The right route depends on the numbers.
A useful review should compare:
- The new rate
- The monthly payment
- Arrangement fees
- Valuation fees
- Legal costs
- Early repayment charges
- Cashback or incentives
- Total cost over the deal period
- Total cost over the mortgage term
- Whether borrowing more is needed
You can also read the wider Connect Mortgages remortgage guide for more detail on how remortgage options are assessed.
Can You Remortgage to Borrow More?
Yes, some homeowners remortgage to borrow more against their property.
This is often called capital raising. It may be considered for home improvements, essential repairs, buying another property, business needs, family support or debt consolidation.
The lender will consider the reason for borrowing, your income, your credit profile, your property value and the loan-to-value. Borrowing more is not guaranteed, even if you have equity in your home.
There are usually three main routes to consider.
Further Advance
A further advance is extra borrowing from your current lender.
Your existing mortgage stays in place, but the lender adds another borrowing part. This may have a different rate, term and end date from your main mortgage.
This can be useful if your current lender offers a suitable option. However, it still needs to be compared against a wider remortgage.
Remortgage with Capital Raising
A remortgage with capital raising replaces your current mortgage and increases the total borrowing.
This may suit homeowners who want one mortgage with one lender. It may also help if another lender offers a more suitable structure.
However, increasing your mortgage can increase the total amount repaid. This is especially important if short-term borrowing is spread over a long mortgage term.
Second Charge Mortgage
A second charge mortgage is a separate loan secured against your home. Your existing mortgage remains in place.
This may be considered if you have a good current mortgage rate, if early repayment charges are high, or if your current lender cannot offer further borrowing.
It is not the same as a remortgage. You would have two secured loans and two monthly payments. For more detail, read our second-charge mortgages guide.
What do lenders check when you remortgage?
A remortgage is still a mortgage application.
Lenders may check your income, outgoings, credit history, property value, mortgage balance and reason for borrowing. They may also consider your age, employment type, mortgage term, dependants, debts and future affordability.
Common checks include:
- Proof of income
- Bank statements
- Credit commitments
- Loan-to-value
- Property type
- Property condition
- Employment status
- Self-employed accounts
- Bonus, overtime or commission income
- Reason for additional borrowing
- Remaining mortgage term
If your credit position has changed, it is better to know early. Our credit file guide can help you understand why lenders review credit history before making a decision.
What Costs Should You Consider?
The lowest rate is not always the lowest-cost option.
A mortgage with a lower rate may include a higher product fee. Another deal may have a slightly higher rate but lower upfront costs. The right comparison should look at the total cost over the deal period and the longer-term cost if the mortgage term changes.
Costs may include:
- Product fees
- Valuation fees
- Broker fees
- Legal fees
- Exit fees
- Early repayment charges
- Higher monthly payments
- Longer-term interest if the term is extended
If you are thinking of moving soon, a new fixed deal may not be suitable if it creates large early repayment charges. The GOV.UK Mortgage Charter also explains support for borrowers managing payment pressure in a higher-rate environment.
Is Remortgaging Always the Right Answer?
No.
Remortgaging can be useful, but it is not suitable for every homeowner.
It may not be the right route if:
- Your current lender offers a better product transfer
- Early repayment charges are too high
- You plan to move soon
- Your income no longer fits lender criteria
- Your credit file has changed
- Your loan-to-value is too high
- The fees outweigh the rate saving
- You are increasing secured borrowing without a clear plan
A good remortgage review should be calm and practical. It should ask one question first: does changing the mortgage improve the overall position, or does it only move the cost somewhere else?
Why Use a Remortgage Adviser?
A remortgage adviser can help compare your current lender’s options with wider market options.
This can be helpful when the decision involves more than a simple rate switch. For example, you may want to borrow more, change the mortgage term, review affordability, check your credit position, or compare a remortgage against a second charge mortgage.
An adviser can help you understand:
- Which lenders may consider your circumstances
- How much you may be able to borrow
- What documents are likely to be needed
- How product transfer options compare
- Whether a full remortgage may be suitable
- How fees affect the total cost
- What risks apply when borrowing more
Use our affordability calculator to get an initial view before speaking with an adviser.
Speak to Connect Lifetime about Remortgaging
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FAQs: Remortgage
Most frequent questions and answers about residential mortgage
You may be able to, but early repayment charges may apply. This is why the timing and total cost need to be checked before you proceed.
Yes, subject to lender criteria, affordability and equity. The lender will want to understand why you are borrowing more and whether the new mortgage remains affordable.
It may be possible, depending on the type, date and severity of the credit issue. Lenders will review your credit file, income, equity and recent payment conduct.
Not always. A remortgage may have a lower rate, but it could trigger early repayment charges or replace a good existing mortgage. A second charge mortgage may keep your main mortgage in place, but it adds another secured loan. The total cost must be compared.
Your lender may move you onto its standard variable rate. This may be higher than your current rate. Reviewing your options before the deal ends can help avoid a sudden payment change.