Remortgage Guide: How to Switch Your Mortgage and Save Money in the UK

Remortgaging can be a powerful financial decision. Whether you’re looking to reduce your monthly payments, secure a better interest rate, or borrow more money, understanding the remortgage process is key. This UK-specific guide covers everything from why and when to remortgage, how it works, and what UK lenders offer, so you can make an informed decision.

What Is Remortgaging and Why Do Homeowners Do It?

Remortgaging means switching your existing mortgage to a new deal—either with your current lender or a new one. It’s not buying a new property, but simply updating the loan secured against your current home.

People remortgage to:

• Get a better interest rate after a fixed or tracker deal ends

• Release equity from their home (borrow more money)

• Switch to a mortgage with more flexibility or better features

• Reduce monthly payments

• Avoid moving onto their lender’s standard variable rate (SVR), which is typically much higher

When Is the Best Time to Remortgage in the UK?

The best time to start the remortgage process is about 3 to 6 months before your current deal ends. This gives you time to compare options and avoid being moved onto the SVR.

Example Scenario

If your 2-year fixed rate deal with Halifax ends in December, you should begin comparing new deals by August or September.

Types of Remortgage Deals in the UK

There are several types of remortgage deals. Choosing the right one depends on your goals and financial situation:

All have pros and cons, and it’s crucial to assess long-term affordability, not just monthly savings.

How Much Does It Cost to Remortgage?

Although remortgaging can save you money, it’s important to understand the potential costs involved:

Tip: Some lenders offer “fee-free” remortgages where legal and valuation costs are covered.

How Does the Remortgaging Process Work?

Here’s a typical timeline for switching mortgage deals in the UK:

1. Check your current deal: Note the end date, interest rate, and early repayment charges.

2. Compare remortgage options: Use a broker or comparison site.

3. Apply for an Agreement in Principle (AIP): Gives a soft credit check.

4. Submit full application: Includes ID, income proof, and property details.

5. Valuation and legal work: Arranged by the lender or via a solicitor.

6. Offer made: Once approved, your new lender issues an official offer.

7. Completion: The new mortgage replaces your old one, and repayments begin under the new terms.

Which UK Banks Offer the Best Remortgage Deals?

Many high street and online lenders offer competitive remortgage options. Here’s a brief look at what some major UK banks provide:

Always compare Annual Percentage Rates (APRs), fees, and terms before deciding.

Can You Borrow More Money When You Remortgage?

Yes. This is called capital raising and allows you to release equity for home improvements, debt consolidation, or other needs.

Example:
Your property is valued at £300,000 and you owe £150,000. You might remortgage for £180,000 and use the extra £30,000 as cash for renovations.

Be aware that borrowing more means higher monthly repayments, and your affordability will be reassessed.

What If You Have Bad Credit?

Some lenders specialise in remortgaging for people with poor credit. You may face:

• Higher interest rates

• Stricter affordability checks

• Limited product choice

Working with a specialist mortgage broker can help you find suitable lenders and explain what you need to improve your credit file.

Can You Remortgage Early?

Yes, but it may cost you. If you’re still within your fixed or tracker period, an Early Repayment Charge (ERC) often applies.

Example:
You have 14 months left on a 5-year fixed deal and your outstanding mortgage is £180,000. If your ERC is 3%, you’ll pay £5,400 to exit early.

Sometimes it’s still worth doing—especially if new rates are significantly lower. Always crunch the numbers with a remortgage calculator or adviser.

Should You Use a Mortgage Broker or Go Direct?

• Going Direct means applying to a lender on your own.

• Using a Broker gives you access to deals not publicly available, especially from smaller lenders or building societies.

Brokers often don’t charge for remortgages, especially if they get commission from the lender. Always check their fee structure first.

Real-Life Example: How Alex from Birmingham Saved £6,500

Alex had a £225,000 mortgage on a 2.4% fixed deal with Lloyds, set to end in August. By remortgaging to a 1.95% 5-year fix with NatWest in July, he:

• Avoided moving onto Lloyds’ SVR of 6.49%

• Saved £108 per month

• Paid no arrangement or legal fees

Over five years, his total saving added up to over £6,500.

Final Thoughts: Is Remortgaging Worth It?

For many UK homeowners, remortgaging is a smart move that can save thousands in interest and help achieve financial goals. Whether you want to reduce payments, lock in a lower rate, or borrow more, timing and comparison are everything.

Before you switch, always:

• Check for early repayment charges

• Consider total costs (not just interest rates)

• Use a reliable mortgage broker or calculator

• Apply 3–6 months before your current deal ends

Done right, remortgaging is one of the most effective financial decisions you can make.