If your mortgage deal is coming to an end, you might be wondering whether it’s time to remortgage. Perhaps your fixed rate is about to expire, your monthly payments could be changing, or you’ve simply started questioning whether your current mortgage is still the right fit.
Remortgaging can give you an opportunity to review your borrowing, compare mortgage deals and potentially improve your financial position. However, switching mortgages isn’t automatically the cheapest option, and the best choice will depend on your circumstances.
In this guide, we’ll explain when to start looking at remortgage options, how the process works, what costs to consider and how to decide whether switching could make sense for you.
Quick answer: When should you remortgage?
For many homeowners coming to the end of a fixed-rate mortgage, it’s worth starting to explore your options around six months before your current deal ends.
Starting early gives you time to compare offers from your existing lender and other providers, understand any fees and arrange a new deal before your current rate expires.
If you do nothing when your fixed or discounted rate ends, your mortgage will usually move onto your lender’s standard variable rate (SVR). This can mean higher monthly payments, although the difference depends on your lender and mortgage terms.
You don’t necessarily need to switch to another lender to get a better deal. Your existing provider may offer a new rate through a product transfer, which could be more suitable than a full remortgage.
The important thing is to review your options before your current deal ends rather than waiting until your payments change.
What is remortgaging?
Remortgaging means replacing your existing mortgage with a new mortgage deal. This might involve staying with your current lender or moving your mortgage to a different provider.
Homeowners often consider remortgaging when a fixed-rate deal is ending, but there are other reasons to review your mortgage. You might want to change the length of your mortgage term, explore borrowing additional money or find a deal that better reflects your current financial circumstances.
For example, imagine you took out a five-year fixed-rate mortgage when you bought your home. As the end of that deal approaches, the interest rate you originally agreed to may no longer be available. You could review the rates your current lender offers and compare them with deals from other lenders.
Depending on your circumstances, you might find an option that reduces your monthly payments, provides greater payment certainty or better suits your plans.
However, remortgaging doesn’t guarantee a saving. Fees, interest rates, the remaining mortgage balance and the length of the new deal all need to be considered.
1. When should you start looking at remortgage deals?
One of the most common mistakes homeowners make is leaving their mortgage review until the last minute.
A useful starting point is to begin exploring your options around six months before your current deal ends. Many lenders allow borrowers to secure a new rate in advance, although the timing and validity of offers vary.
This gives you time to compare products, understand the costs and complete any necessary application process without rushing.
Six months before your deal ends
Start by checking the exact date your current mortgage deal finishes. Your annual mortgage statement, lender’s online account or original mortgage documents may contain this information.
You can then begin comparing options with your existing lender and other providers. If you find a suitable deal early, you may be able to secure it for a future start date.
Three months before your deal ends
If you haven’t already done so, this is a good time to narrow down your options and consider any application requirements.
If you’re switching lenders, the process may involve affordability checks, a property valuation and legal work. Starting early leaves more time to deal with any questions or delays.
When your current deal expires
Ideally, your new mortgage deal will begin when your existing arrangement ends, subject to the lender’s terms and the completion of any required steps.
If you haven’t arranged a new deal, your mortgage will usually revert to the lender’s SVR. This isn’t necessarily permanent, but it can make your monthly payments more expensive than expected.
MoneyHelper recommends reviewing your mortgage well before your current deal ends so you have time to consider the alternatives.
2. Could remortgaging save you money?
Potentially, yes. But the answer depends on more than the interest rate advertised.
If you can secure a lower interest rate than your current deal, you might reduce your monthly repayments or the amount of interest you pay over time. However, a lower rate doesn’t automatically mean the new mortgage will cost less overall.
You need to consider the mortgage balance, remaining term, product fees and any costs involved in switching.
An example of how a lower rate could affect your payments
Imagine you have £180,000 remaining on a repayment mortgage with 20 years left.
The table below illustrates how different interest rates could affect the monthly repayment, assuming the balance and remaining term stay the same.
| Illustrative interest rate | Approximate monthly repayment |
|---|---|
| 5.5% | £1,238 |
| 4.5% | £1,139 |
| 3.5% | £1,044 |
These figures are illustrative estimates, not current mortgage offers. They assume a capital repayment mortgage with monthly payments and exclude fees or other charges.
In this example, a reduction from 5.5% to 4.5% would lower the estimated monthly repayment by around £99.
That could make a meaningful difference to a household budget. However, whether you can access a particular rate depends on factors such as your loan-to-value ratio, credit history, income and lender eligibility criteria.
You should also compare the total cost of the mortgage over the period you’re considering, rather than focusing exclusively on the monthly payment.
Don’t overlook mortgage fees
Some mortgage deals come with product fees, which may be payable upfront or added to the mortgage balance.
You may also need to consider valuation fees, legal costs, administration charges and any early repayment charge associated with leaving your existing deal early.
Some remortgage products include incentives such as a free valuation or legal work, but you should check exactly what’s covered.
A deal with a slightly higher interest rate and lower fees could work out cheaper than one with a lower headline rate and a substantial product fee.
The best comparison looks at the overall cost of each option over the relevant period.
3. Should you remortgage with your existing lender or switch?
When your mortgage deal ends, you generally have two main routes to consider: taking a new deal with your existing lender or moving to a different lender.
Neither option is automatically better. The right choice depends on the products available, your circumstances and the costs involved.
Option one: A product transfer with your current lender
A product transfer means switching to another mortgage deal offered by your existing lender.
One advantage is that the process can be relatively straightforward. Depending on the lender and the changes you’re making, you may not need the same level of legal work or affordability assessment involved in a full remortgage.
It can also be convenient if your current lender offers a competitive rate that suits your needs.
However, you shouldn’t assume that your existing lender automatically offers the best deal available. It’s worth comparing its options with alternatives before making a decision.
Option two: Remortgaging to a different lender
Moving to another lender may give you access to a different range of mortgage products, rates or features.
This could be worth exploring if your existing lender’s offers aren’t competitive or if another provider better suits your plans.
However, switching lenders usually involves a new application. The lender will assess your circumstances, and the process may require a valuation and legal work.
You should also check whether any costs apply and whether the new lender’s criteria fit your situation.
Which option is best?
The simplest way to approach the decision is to compare both routes on a like-for-like basis.
Look at the interest rate, product fees, monthly repayments, mortgage term and any relevant charges. Also consider whether you need any additional features, such as the ability to make overpayments or repay the mortgage early.
A mortgage adviser can help you understand the differences between available options and assess which may be appropriate for your circumstances.
4. What happens when your fixed-rate mortgage ends?
When your fixed-rate mortgage ends, the interest rate doesn’t necessarily stay the same.
Unless you’ve arranged another deal or your mortgage terms provide otherwise, your loan will generally move onto your lender’s standard variable rate.
An SVR is an interest rate set by your lender, and it can change over time. It may be higher than the rate you were paying during your fixed term, which could increase your monthly repayments.
For example, if you’ve been paying a relatively low fixed rate for several years, moving onto a higher SVR could mean a noticeable change to your household budget.
The effect will depend on your outstanding balance, remaining mortgage term and the rates involved.
This is why it’s important to check your mortgage end date and explore your options in advance. You may be able to arrange a new deal before your current one expires, helping you plan for the change.
If your fixed rate has already ended, it’s still worth reviewing your options. You may be able to move onto another deal, subject to the lender’s requirements and any applicable charges.
5. Can you remortgage if your circumstances have changed?
Yes, it may still be possible to remortgage if your circumstances have changed. However, those changes could affect the options available to you.
When you apply to a new lender, they will generally assess your current financial position, including your income, regular expenditure, credit history and existing commitments.
This means a mortgage that was suitable several years ago may not be the only option worth considering today.
If your income has increased
A higher income could improve your affordability position, depending on your commitments and the lender’s assessment. It may also be relevant if you’re considering borrowing additional money.
However, lenders assess applications individually, and a higher income doesn’t guarantee acceptance.
If you’re now self-employed
Self-employed applicants may need to provide evidence of their income through accounts, tax calculations or other documents. Requirements vary between lenders, and some may assess different types of self-employed income in different ways.
If your income varies from year to year, it’s worth understanding how a lender may assess it before applying.
If you’ve experienced credit problems
Missed payments, defaults, CCJs and other adverse credit events can affect your remortgage options.
Some lenders may be more flexible than others, but the impact will depend on the type of issue, when it occurred and your wider financial circumstances.
If your credit history has changed since you took out your existing mortgage, getting advice before making applications may help you understand which options are realistic.
If your household circumstances have changed
Changes such as having children, taking on new financial commitments or changing employment could affect affordability.
It’s important to consider how a new mortgage would fit your current budget, rather than assuming you can borrow the same amount or access the same deals as before.
6. Can you borrow more money when remortgaging?
You may be able to borrow additional money when remortgaging, depending on your equity, income, outgoings and the lender’s criteria.
Some homeowners consider additional borrowing to fund home improvements, consolidate certain debts or meet another significant expense.
However, increasing your mortgage balance means borrowing more against your property. This can increase your monthly repayments or the total interest you pay over time.
Using mortgage borrowing to consolidate unsecured debts also changes the nature of those debts: the borrowing becomes secured against your home, which could put your property at risk if you don’t keep up with repayments.
If you’re considering additional borrowing, think carefully about the purpose, cost and repayment implications. Other forms of finance may be more appropriate in some circumstances.
A mortgage adviser can explain whether additional borrowing may be available and help you understand the relevant mortgage options.
7. What costs should you check before remortgaging?
Before choosing a new mortgage, make sure you understand the costs involved. These can affect whether switching is financially worthwhile.
Product fees
Some mortgage products charge a fee for taking out the deal. Compare the fee with the potential savings from the interest rate, and check whether adding the fee to the mortgage would increase the total interest you pay.
Early repayment charges
If you leave your current mortgage deal before the agreed date, you may have to pay an early repayment charge.
These charges can be significant, depending on your mortgage terms. Before switching early, check the exact amount and whether any potential savings would outweigh it.
Legal and valuation costs
A remortgage with a new lender may involve legal work and a property valuation. Some lenders include these services as part of their products, while others may charge separately.
Other mortgage costs
Check for administration charges and any other fees associated with your existing mortgage or the new product.
It is also worth considering whether the new mortgage has restrictions on overpayments, early repayment or other features that matter to you.
MoneyHelper’s guide to remortgaging to cut costs explains why fees and early repayment charges should be included when comparing mortgage deals.
8. What information do you need to remortgage?
You don’t necessarily need every document ready before exploring your options, but having some basic information available can make the process easier.
Start by finding out when your current deal ends, how much you still owe and what your current interest rate is. It’s also useful to know your remaining mortgage term and whether any early repayment charges apply.
If you’re considering switching lenders, you may need to provide evidence of your income, details of your regular outgoings and information about your existing financial commitments. Self-employed applicants may need additional evidence of their earnings.
The new lender may also require information about the property and its value.
The exact requirements will depend on the lender, the mortgage product and your circumstances. An adviser can explain what information is likely to be needed and help you understand the next steps.
9. Common remortgaging mistakes to avoid
A little preparation can help you avoid some common mistakes when reviewing your mortgage.
Waiting until your current deal has ended. Leaving your review too late could mean you move onto your lender’s SVR while you arrange another deal. Start exploring your options in advance.
Choosing a deal based only on the interest rate. Product fees and other charges can change the overall cost. Compare the total cost over the period you’re considering.
Assuming your current lender offers the best deal. Your existing lender may have a competitive product, but it’s worth comparing alternatives before deciding.
Ignoring early repayment charges. Switching before your current deal ends may trigger a charge that outweighs the benefit of a lower rate.
Extending your mortgage term without considering the consequences. A longer term may reduce monthly repayments, but it can also mean paying interest for longer and increasing the total amount repaid.
Assuming you’ll automatically qualify for the same borrowing. Lenders have their own eligibility and affordability criteria, and your financial circumstances may have changed since your last application.
Taking time to compare your options can help you make a more informed decision.
Frequently asked questions about remortgaging
How long does it take to remortgage?
The time required varies depending on the lender, the application and whether you’re switching providers. A straightforward application may complete relatively quickly, while other cases can take longer if additional checks or legal work are needed. Starting several months before your current deal ends gives you more time to complete the process.
Can I remortgage before my fixed rate ends?
You can apply to change your mortgage before your current deal ends, but doing so may trigger an early repayment charge. Some lenders allow you to secure a future rate in advance without immediately ending your existing deal. Check your mortgage terms and compare the costs before deciding.
Is remortgaging always cheaper than staying with my current lender?
No. Your existing lender may offer a competitive product transfer, and switching to another provider can involve fees or additional costs. Compare the total cost of both options before making a decision.
Can I remortgage if I’m self-employed?
Yes, it may be possible. Lenders will assess your income and financial circumstances, and the evidence they require will vary. Some may ask for tax calculations, accounts or other documentation to assess your earnings.
Can I remortgage with bad credit?
Potentially. Your options will depend on the type of credit issue, when it occurred, your current financial circumstances and the lender’s criteria. Some lenders may consider applicants with adverse credit, although eligibility and pricing can differ.
Should I speak to a mortgage adviser before remortgaging?
An adviser can help you compare mortgage options, understand lender requirements and assess the costs involved. This may be particularly useful if your circumstances have changed, you’re considering additional borrowing or you’re unsure whether to stay with your existing lender.
Final thoughts: Is it time to review your mortgage?
Remortgaging can be an opportunity to review your borrowing, compare mortgage deals and make sure your current arrangement still suits your needs.
For many homeowners, the best time to start is around six months before their current deal ends. This gives you time to compare your existing lender’s offers with alternatives, understand the costs and arrange a new deal if appropriate.
Remember that the lowest advertised interest rate isn’t necessarily the cheapest overall option. Your mortgage balance, remaining term, fees, credit history and financial circumstances all matter.
Whether your fixed rate is ending soon or you simply want to understand your options, taking the time to review your mortgage can help you make a more informed decision.
Find a mortgage adviser through OnTheLadder
You don’t have to work through your remortgage options alone. A mortgage adviser can discuss your circumstances, explain the options that may be available and help you understand what to consider before making a decision.
OnTheLadder connects homeowners looking for mortgage help with mortgage advisers.
If you’re thinking about remortgaging, submit an enquiry through OnTheLadder to tell us a little about your circumstances and what you’re looking to achieve.
Find a Mortgage Adviser Through OnTheLadder
An enquiry doesn’t commit you to taking out a mortgage. Any mortgage recommendation or application will depend on your circumstances, the adviser’s service and the relevant lender’s criteria.
This article is for general information only and is not financial advice. Mortgage products, rates, fees and eligibility criteria change. Consider speaking to an appropriately authorised mortgage adviser about your individual circumstances.