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Your mortgage could be costing you thousands of pounds over the course of your loan term. The mortgage market today is competitive, with plenty of lenders offering great deals to all types of borrowers. If you decide to remortgage you could end up with a cheaper deal which covers what you need.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Remortgaging is the act of switching mortgages. This can be by moving your loan to a new lender, or just by changing the type of loan you have with your existing lender.
Usually, remortgaging is done to get a lower rate or a loan suitable for a major project such as a property renovation.
It’s usually done by switching to a lender that offers a better interest rate or features such as payment holidays that might better suit your situation.
There’s a range of reasons why you might want to part company with your existing lender or deal and look for a new one.
It’s always a good idea to approach your existing lender first to ask for a better interest rate. Make sure you do your research beforehand and show them the existing deals in the market and ask if they can match it. Staying with your existing lender could mean that you save on discharge or exit fees plus application fees of your new loan, not to mention the amount of paperwork you’ve saved.
If you’ve built a significant amount of equity in your home you can remortgage to use this equity to purchase other properties or assets, such as funding a renovation for your home or purchasing a new car. One of the advantages to this is that you can purchase an item with the same interest rate as your home loan, rather than committing to an interest rate offered on a personal loan or credit card. However, one of the risks of accessing this equity is that it might take a bit longer to pay off your mortgage.
Here are some scenarios where remortgaging tends to be a good idea.
If you’re dealing with any of these situations, you may want to think twice about remortgaging.
Whilst remortgaging has the potential to save you money, there are a number of fees involved that are worth considering before you begin the application process.
Overall satisfaction | Would recommend | Issuer | Review | |
---|---|---|---|---|
★★★★★ | 88% | ![]() | Nationwide is the UK’s second-largest mortgage provider. It offers a vast range of mortgages for first-time buyers. The maximum loan-to-value is 90% – and Nationwide offers £500 cashback to first-time buyers. Nationwide also offers savings accounts that pay bonuses if the money is used on a Nationwide mortgage. | Compare with broker |
★★★★★ | 91% | ![]() | Similarly to Halifax, you could potentially be eligible for a 90% loan-to-value mortgage with Lloyds Bank. These deals typically come with terms of either two years or five years. The more you can put forward as a mortgage deposit, the better deals you’ll find available. | Compare with broker |
★★★★★ | 88% | ![]() | HSBC is a solid choice for your first mortgage, for a number of reasons. First off, they offer a range of 95% mortgages, which are perfect if you don’t have much money to contribute to a deposit. Perhaps more importantly, HSBC regularly appears at the top of the best-rate tables and tends to be lenient when it comes to overpayments. | Compare with broker |
★★★★★ | 88% | ![]() | If you remortgage to Halifax offers first-time buyer mortgages worth up to 90% of a property’s value. Halifax mostly offers fixed-rate mortgages with terms of two years or five years. There are mortgages with a fee and some with no fee. If you have a deposit worth more than 10%, you could be eligible for a better deal. td> | Compare with broker |
★★★★★ | 76% | ![]() | L&C is the UK’s largest mortgage broker. Its mortgage advisers will search through deals from over 90 UK mortgage lenders to find the best deal for first-time buyers. You can see the deals you qualify for – and how much you may be able to borrow – by taking a quick online survey. You’ll pay no fee to L&C until you proceed and complete your mortgage. | Visit broker |
The best remortgaging deal is one that suits your mortgage needs while not raising your expenses. Ideally, a good remortgaging deal will lower your ongoing expenses and periodic repayments by offering a lower interest rate and more suitable features.
Before doing your research, you should ask yourself the following:
The remortgaging process takes typically between 8 and 12 weeks from the start of the process and the date you’d like your new deal to start.
Remortgaging might not be as complicated as when you first bought a house, but it could still take a couple of months.
This will give you plenty of time for the professionals you work with to complete their parts of the transaction.
If you choose to remortgage with your existing lender, the process should be completed much faster with fewer complications.
However, there’s no guarantee your existing lender will offer you the best deal, so it’s worth shopping around. After all, the difference between the best remortgage deal and a mediocre one could run into thousands of pounds over the rest of your mortgage term.
To give you a clearer example of the costs above, we’ve broken down an example estimate of the fees that you may face when remortgaging. Note that these fees can vary from one lender to another.
Expense type | Cost |
---|---|
Arrangement fee | £1,000-£2,000+ |
Booking fee | £100-£200 |
Valuation fee | £300-£400 |
Conveyancing fee | £300–£1,000 |
Broker fee | £300-£1,000+ |
Early repayment charge | 1-5% of the value of the early repayment |
Exit fee | £75-£300 |
You won’t need a conveyancing solicitor if you’re moving to a different deal with the same lender. In fact, the whole process will involve less hassle. However, if you’re changing providers, you’ll need a solicitor to facilitate this process.
Remortgaging will involve the same affordability checks as when you originally bought the house. If your credit score or income has worsened since then, you may struggle to be approved for a better deal. You may still have options to remortgage with bad credit, but the rates are unlikely to be particularly favourable.
If you’ve recently changed jobs, this could prove problematic for a remortgage application, because your income is deemed less stable by lenders. It could be particularly problematic if you’ve recently become self-employed. Lenders want to see a minimum of one year’s – and ideally three years’ – worth of accounts before approving self-employed applicants.
What’s more, some mortgages require you to keep them for a certain amount of time, usually at least six months.
Remortgaging can often be the most cost-effective method of raising funds for home improvements. As long as you have equity in your home and can afford the new monthly repayments, it’s likely to be a suitable option for you. Our guide explains how it works.
If you’re looking to invest in a buy-to-let property, it may be possible to remortgage your home in order to raise a deposit. To make this work, you’ll need a decent amount of equity in your home and enough income to be able to afford the new monthly repayments. Read our guide to learn more.
There are no specific rules limiting the amount of times you can remortgage. However, you’ll usually face one-off fees and a dip to your credit score each time you do it. So, in theory, it should become more difficult to be approved for a remortgage each time you try, because lenders will complete a new assessment of your finances, credit score and ability to repay the loan.
Matthew Boyle is a banking and mortgages publisher at Finder. He has a 7-year history of publishing helpful guides to assist consumers in making better decisions. In his spare time, you will find him walking in the Norfolk countryside admiring the local wildlife.
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Remortgaging your first property to buy another could prove fruitful for your finances in the long run. Read our guide to discover how it works.
Knowing just how much equity you have in your home before you start looking to remortgage is crucial.
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I would like to borrow against the investment property I currently own in London. The property is 100% paid with no existing mortgage against it. I am no longer living in the UK (I used to work for Vodafone). I am a USA citizen living in the US now.
Is my request possible?
Hi Hamid,
Thanks for getting in touch with finder. I hope all is well with you. :)
If you are planning to apply for a personal loan using your property as collateral, then this is possible. We do have a list of personal loans in the UK that you might want to check. However, since you are already in the US and you are no longer a citizen of the UK, you might have a limited option.
What I can suggest is for you to start asking big banks in the UK. Discuss with them your situation and they should be able to provide available options for you.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua