Comprehensive Guide to Remortgaging in the UK

Quick Navigation

• What is Remortgage?

• When to Start Looking

• Step-by-Step Guide

• Required Documentation

• Understanding Product Transfers

• Costs and Considerations

• Special Circumstances

What is a Remortgage?

Remortgaging involves switching your existing mortgage to a new deal, either with your current lender or a different provider. It's a crucial financial decision that could save you thousands of pounds over the life of your mortgage.

⚠️ Important Warning

If you don't secure a new deal before your current mortgage expires, you'll automatically move to your lender's Standard Variable Rate (SVR), which is typically much higher than your current rate. This could result in significantly higher monthly payments.

When to Start Looking for Remortgaging

The optimal time to begin your remortgage search is 5-6 months before your current deal expires. Here's why:

• Mortgage offers typically remain valid for this period

• Gives you ample time to compare deals

• Allows for application processing

• Helps avoid moving to the SVR

How to Check Your Current Mortgage Deal Expiry Date

You can find this information in several ways:

1. Check your original mortgage offer

2. Contact your current lender directly

Step-by-Step Guide to Remortgaging

1. Check Your Current Mortgage Balance

Before starting the process, determine your outstanding mortgage balance by:

• Reviewing your latest mortgage statement

• Checking your original mortgage documents

• Contacting your lender directly

2. Assess Your Affordability

Calculate whether remortgaging is feasible based on:

• Current income (typically 4.5x your annual income)

• Changes in employment status

• Number of applicants

• Existing commitments

Key Financial Metrics:

• Debt-to-income ratio should be under 40%

• Minimum 6 months continuous employment history

3. Check Your Credit Status

• Review all three credit agencies

• Use CheckMyFile (free for first month, £14.99 thereafter)

• Address any issues before applying

4. Gather Required Documentation

Essential Documents:

• Valid passport or driving license

• Recent bank statements

• Latest payslips

• Proof of address (utility bills)

• Self-employed: Two years of accounts

Understanding Product Transfers

Benefits of Staying with Current Lender:

• No property valuation required

• No legal fees

• Simplified documentation

• Faster process

Why Consider Other Lenders:

• Potentially better interest rates

• Access to different mortgage types

• Possibility of borrowing additional funds

Costs and Considerations when Remortgaging

Potential Fees:

• Arrangement fees

• Valuation fees (often free)

• Legal fees (often free)

• Early repayment charges (ERCs)

Smart Tips:

1. Consider deals with cashback and using your own solicitor

2. Calculate total cost including all fees

3. Compare adding fees to mortgage vs paying upfront

Special Circumstances

Early Exit Considerations:

• Fixed-rate mortgages typically have penalties

• Variable rates (trackers/discount rates) may have no tie-ins

• Aim to complete the day after your current deal ends

Additional Borrowing Options:

You might be able to borrow extra for:

• Home improvements

• Property investment

• Debt consolidation

⚠️ Important Warning

Think carefully before securing other debts against your home. By consolidating your debts into a mortgage, you may be required to pay more over the entire term than you would with your existing debt.

Expert Tips for Success

1. Compare Thoroughly:

   • Check your current lender's offers

   • Research market-wide deals

   • Consider both rate and fees

2. Watch for Processing Times:

   • Free legal services can be slower

   • Consider paying for your own solicitor

   • Use cashback offers to offset costs

3. Consider Alternative Options:

   • Product transfers for simplified process

   • Specialist lenders for unique circumstances

   • Broker access for exclusive deals

Final Remortgaging Checklist

✅ Start search 5-6 months before current deal expires
✅ Check current mortgage balance
✅ Review credit reports
✅ Gather all required documents
✅ Compare current lender vs market deals
✅ Calculate total costs including fees
✅ Consider using own solicitor

Remember: The cheapest rate isn't always the best deal. Consider the total cost including fees, the level of service, and processing times when making your decision.