How Does a Remortgage Work?

Introduction

If you’re asking, “How does a remortgage work?”, don’t worry you are absolutely not alone. Whilst it is a common transaction that takes place across the UK, you don’t necessarily know how it works, or what it is unless you have done them before, or had a reason to know.

Remortgaging simply means switching your existing mortgage to a new deal, either with your current lender or a new one. For many homeowners, remortgaging can be a smart way to save money, reduce monthly payments or unlock funds tied up in their property so that they can cover one-off costs, repay debts or cover home improvements.

At The Mortgage Broker, we specialise in helping people across the UK navigate this process with clear, straightforward advice that not just puts your needs first, but also gives you access to the best rates across over 130+ Lenders; many mortgage lenders which you wouldn’t otherwise have access to.
The biggest mistake people make, is simply renewing your mortgage with your current lender. It is vitally important you research the market, as there are often rates far better from the thousands available, than the few your current lender can offer you.

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What is a Remortgage?

In summary, a remortgage is when you move your mortgage from your current lender to a new one, or switch to a new deal with the same lender. You may hear a phrase called a “product switch”. If you are moving to a new deal but with the same lender, this can be known as a product switch.

Remortgaging is not about buying a new home. It is about changing the debt you have on your current property. Many people remortgage to secure better rates, reduce their repayments, or to release some of the value they’ve built up in their home. Understanding how remortgaging works can help you to take the right steps now and make the right financial decisions when the time is right.

Why Do People Remortgage?

There are several common reasons why homeowners choose to remortgage:

• To get a better interest rate – Lower rates can significantly reduce monthly payments and in this fluctuating market, it is really important to search the thousands of products out there.
• To release equity – You can access some of the money tied up in your home for other uses, most commonly, repay, home improvements or other one-off costs.
• To consolidate debts – Combining debts into one manageable payment can make life easier, more management and more affordable with one payment. This is known as a debt consolidation remortgage.
• To avoid the Standard Variable Rate (SVR) – When your fixed deal ends, you will move to an SVR, which is more often than not, significantly more to pay each month, so remortgaging is really important to avoid this.
  Knowing how a remortgage works can save you money and give you more control over your finances.

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The Remortgaging Process: Step-by-Step

When you’re ready to explore your remortgage options, the process typically looks like this:

• Review your current mortgage – Understand your current interest rate, terms, and any early repayment charges. (An early repayment charge is a potential penalty that some mortgages have if you stop it early).
• Assess your financial situation – Check your income, outgoings, and credit score to see what deals you may be eligible for. This is a very quick check.
• Research new deals – Compare the latest remortgage products to find one that suits your needs. This can be done digitally in moments.
• Get a mortgage in principle – This is an indication from a lender that they could offer you a mortgage, subject to full checks.
• Valuation and legal checks – The lender will arrange a property valuation and carry out the legal work.
• Completion – Once everything is approved, your new mortgage replaces the old one, and your new payments begin.

Our team at The Mortgage Broker is here to guide you through each step, and ultimately, you will have very little to do.

When is the Right Time to Remortgage?

The best time to start the remortgage process is usually six months before your current deal ends. Remortgaging should always be considered due to one of these reasons:

• Market rates have improved.
• Your property value has increased, giving you better options.
• Your current deal is no longer competitive.
• You want to avoid moving onto your lender’s Standard Variable Rate (SVR).
  Be mindful of early repayment charges and always check whether it’s financially beneficial to switch now or wait.

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Costs Involved in Remortgaging

Remortgaging comes with some costs you should be aware of, but The Mortgage Broker will advise on the right decision and ensure that you are financially improving your situation.

• Arrangement fees – Charged by the lender for setting up the new mortgage.
• Legal fees and valuation fees – Sometimes covered by the lender as part of the deal.
• Early repayment charges (ERCs) – If you’re leaving your current mortgage before the agreed term ends.
• Possible hidden fees – Always check the small print.
  Some lenders offer incentives like free legal work or free valuations, which can help reduce your costs.

How The Mortgage Broker Can Help

At The Mortgage Broker, we make remortgaging simple.

We provide tailored advice and access to a wide range of lenders, ensuring you find the right deal for your situation. Our independent experts take the stress out of the process and support you from start to finish. With our clear, customer-first approach, you can move forward with confidence.
Remortgaging can be a very smart financial move, helping you save money, access better deals, or unlock equity in your home. If you’re still wondering how does a remortgage work for your unique situation, our friendly experts are here to help.

Call Us 0800 0320 316

Or Book a Free Remortgage Appointment

 

Quick fire FAQs with Adrian McGlennon, Mortgage Adviser

How long does a remortgage take?

A typical remortgage takes 4-8 weeks, depending on the lender, how quickly documents are provided, and whether any legal work is required. Straightforward product switches with the same lender can be much faster. Your adviser will guide you through each step to keep things moving smoothly.

Do I need a solicitor to remortgage?

Yes, if you are switching to a new lender, some legal work is required, but many lenders offer free legal packages as part of their remortgage products. If you are staying with the same lender for a product switch, a solicitor is usually not needed.

Can I remortgage with bad credit?

Potentially, yes. Your options may be more limited, but many specialist lenders will consider applications from borrowers with past credit issues. An adviser can review your situation, check your credit file, and recommend suitable lenders.

Can I remortgage early?

You can remortgage before your current deal ends, but you may have to pay early repayment charges (ERCs). Sometimes switching early still saves money overall, depending on rates and your remaining term. An adviser can run the calculations to help you decide the best time to act.

How much equity do I need to remortgage?

Most lenders prefer you to have at least 10%-20% equity in your property, although this varies. The more equity you have, the better the rates you may be able to access. A recent valuation or market assessment can help you understand where you stand.

 

You can request a free, no-obligation mortgage review with a qualified adviser now.

No mortgage offer, no broker fee.

 

Author: Adrian McGlennon, Mortgage Adviser