Written by: Danny Belton - Head of Lending
We’re often asked when the right time to remortgage is, and in fact, how soon can you remortgage? The response to that is simple.
Don’t assume you need to wait until your current mortgage deal ends before you get the ball rolling. Start the remortgage process early - around six months before your existing deal ends.
This will give you time to potentially find a more competitive mortgage deal, though with current market conditions, it’s all about getting the most reasonable interest rate for your circumstances.
If you don’t find a better mortgage deal at the end of your current term, you may revert to your lender’s standard variable rate (SVR). This could be considerably higher and greatly increase your monthly payments.
In this article
What is the remortgaging process?
How soon can you remortgage a property after a purchase?
When is the best time to remortgage?
How long does it take to remortgage?
How much will remortgaging cost?
What are the benefits of remortgaging my home?
Why should you remortgage?
Remortgaging is very common, and most people remortgage onto some form of fixed rate for the peace of mind of knowing exactly how much they’ll be repaying each month. According to Finder.com, there were around 13 million residential mortgages outstanding in the UK by the end of 20231. What’s more, around 1.5m of those with fixed rate mortgage deals are due to come to an end this year.2
While there are occasionally reasons to move onto your lender's SVR, we always recommend speaking to your mortgage adviser about what is going to work best for you. 1.6 million mortgage deals are due to end in 20243 - are you one of them?
Andrew Milnes, Business Principal and Mortgage Adviser, MAB Bingley, added: “You can remortgage for a number of reasons, but the most common is when the deal you’re currently on expires. If you do nothing, you risk moving onto the lender’s standard variable rate, which could be a lot higher than you’ve been used to paying. A mortgage adviser won’t just look at the possibility of remortgaging to another lender, but will also consider the options your current lender can offer you.”
What is the remortgaging process?
Remortgaging is when you consider moving your mortgage from one deal to another, either with the same lender or a new one.
In the same way that you’d look for the cheapest phone bill or insurance deal, remortgaging gives you the opportunity to shop around. This means you can decide if your current mortgage is still the best option for you.
Like when you took out your original mortgage, lenders will still need to make sure you can make your monthly repayments. Therefore, you’ll still need to submit proof of income, and you may even need to undergo new credit checks.
If you’re interested in finding out how much you could borrow, why not check out our monthly repayments calculator? This could give you an idea of what you can expect to pay each month.
How soon can you remortgage a property after a purchase?
Most lenders will allow you to remortgage six months after you have purchased the property. There is the possibility of remortgaging sooner if you need to, as the rules vary from lender to lender. Ensure your mortgage adviser is aware if you want to remortgage sooner than six months, as they may be able to find a solution that suits you.
When is the best time to remortgage?
Make sure you know when your current mortgage deal is due to come to an end, and start speaking to an adviser at least six months before this. Everyone’s financial circumstances are different, so there is no definitive ‘best’ time to remortgage. If you need to remortgage due to other circumstances, an adviser will be able to help you decide on the most suitable option.
Andrew Milnes, Business Principal/Mortgage Adviser at MAB Bingley, agrees:
“The best time to look at a remortgage option is at least six months before your current deal ends, with many offers on new deals being valid for up to 6 months. This enables you to plan plenty of time in advance of your current deal ending, and should ensure that you won’t risk moving on to a lender’s standard variable rate, which can sometimes be quite high. An adviser will then regularly check each month as you approach the end date of your current mortgage deal to make sure your offer is still the most suitable option for your current circumstances.”
We have a tool that not only delivers a monthly home report but also helps you monitor your current mortgage, so you’re always kept updated when a better deal becomes available.
How long does it take to remortgage?
It typically takes between four to eight weeks to remortgage. However, this period of time is not necessarily guaranteed, as no two applications are the same. It’s good practice to prepare all your documentation ahead of schedule, as this will ensure that there are no hold-ups on your side.
What is early remortgaging?
Remortgaging early is a simple process. It means switching from one deal to another before your current mortgage is up. There are a handful of reasons why you may consider an early remortgage and each person will have their own, unique circumstances.
Can you remortgage early?
While many choose to remortgage around six months before their current mortgage deal ends, there is the option to remortgage sooner if you want to. However, bear in mind that you may need to pay an Early Repayment Charge (ERC) as a result. Speak to your mortgage adviser about the potential of remortgaging early, as they will be able to work with you to find a solution that best suits your needs.
How much will remortgaging cost?
When it comes to remortgaging, there are a number of costs that you’ll need to take into account, from the Early Repayment Charge to legal, valuation, arrangement, and broker fees. Click here to check out our article on how much remortgaging could potentially cost you.
What are the benefits of remortgaging my home?
There are many reasons people might want to remortgage. It isn’t just about saving money, though that could be a significant benefit. Other reasons include:
- To release equity from your home to fund renovations
- To release equity to help pay off debts
- Your current mortgage rate is up for renewal
- To make overpayments
Top tips for getting ready to remortgage
The only reason to wait until the last minute is under the hope that mortgage rates will fall, but this decline is steady. As we’ve seen, the market can be unpredictable. For stability and certainty, we recommend working with a mortgage adviser. An adviser knows the ins and outs of different lenders’ offer periods, and can help you snag a mortgage deal that works for you.
Your credit report is the key to unlocking more favourable mortgage terms. There are a variety of factors that will affect your creditworthiness, but there’s plenty you can do to make improvements in your score, even small ones. Click the button below for more details about improving your credit score!
It’s good practice to avoid regularly dipping into your overdraft, especially in the months leading up to your mortgage application. Some lenders may look unfavourably upon this, viewing your reliance on your overdraft as an indication that you’d potentially find it difficult to meet your mortgage payments. However, it's important to note that an occasional small overdraft usage probably won't derail your mortgage application.
Patience is key, which is why we recommend waiting six months between seeking credit and remortgaging. Anything less than that (and below three months in particular) could have a negative impact on both your credit score and mortgage application.
Lenders need to see a pretty sizable chunk of paperwork throughout the mortgage application process. From bank statements and payslips to proof of address and ID documents, we encourage you to gather all your evidence ahead of time. Being prepared means smoother sailing when it comes to securing your next mortgage deal.
Punctuality is important when it comes to bill payments. In fact, it’s one of the most important things! Whether it’s your phone or utility bill, pay on time, every time. Late payments could linger on your credit file for years, so avoid it altogether by setting up direct debits.
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Think you’re ready to remortgage?
Our experts can offer advice about the right time to remortgage, and guide you through the whole process when you’re ready. We have access to mortgage deals not found on the high street, which means we’re perfectly placed to help you find a product that suits your unique circumstances.
Frequently asked questions
There’s technically no limit to the number of times you can remortgage your property. However, speaking with a mortgage broker will ensure you make the most suitable decision for your circumstances.
If you have a fixed-rate mortgage and you pay your mortgage off early, you'll likely need to pay an early repayment charge. Your mortgage documents will explain the conditions under which you'd have to pay an early repayment charge and how much this will be.
You can remortgage early if you're on a fixed rate, but you will likely need to pay an early repayment charge.
When remortgaging, the lender will undertake a valuation of the property to calculate the loan-to-value ratio, and its current market value.
Remortgaging to pay off debt is possible - whether by reducing your monthly mortgage payments, or by using the equity in your property to increase your loan amount. This isn’t a decision to be taken lightly, so it’s important to speak with a mortgage broker to ensure this is right for you.
If you remortgage with your current lender (known as a product transfer), you won’t be required to undertake a legal transaction. However, you will need a solicitor if you’re remortgaging with a new lender.
You shouldn’t typically require a deposit in order to remortgage. This is because remortgaging involves using the equity you've built up in your current property as security for the loan.
You’ll be required to provide essential documentation when you remortgage, and this includes three months’ worth of your most recent payslips and bank statements as proof of income.
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
You may have to pay an early repayment charge to your existing lender if you remortgage.
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