What is remortgaging, when should you consider it, and will it save you money? These and more questions answered…

What is remortgaging?

Remortgaging simply means finding a new mortgage product to replace your current one. Over the last decade, most borrowers will have replaced their current interest rate with a lower rate, saving them money. However, the increase in the cost of borrowing we’ve seen since early 2022 means that this is unlikely to be the case.

Why should I consider remortgaging?

Most mortgages have an end date, where the initial rate will end. When this happens, the likelihood is that the borrower will revert to the lender’s standard variable rate, which is likely to be higher.

How long does remortgaging take?

It varies but can typically take between four to eight weeks.

How complicated is it to remortgage?

It’s normally fairly straightforward, but it does involve making a mortgage application to a new lender. While there is a legal process in switching from one lender to another, it’s not a big task for a solicitor to undertake and therefore isn’t too time-consuming.

Can you move your mortgage early to get a better deal?

You can, but you may incur an early repayment penalty, which may negate the benefit of any saving you could make by paying a lower rate of interest (although, as mentioned, savings are currently hard to find on remortgages due to interest rates going up). It’s worth speaking to an experienced mortgage broker who can advise you on your options.

Is a remortgage the same as a product transfer?

Not exactly. A product transfer means you’ll stay with the same lender and secure a new rate, but you will only have access to the options they have on offer rather than being able to look at options from a range of other lenders.

With a product transfer, your existing lender is unlikely to need to do further checks, and there is no legal work required. It could be cheaper to look elsewhere at a different lender.

How much time should you allow before you start the process of remortgaging?

Ideally, six months as this will give your broker plenty of time to look around on your behalf. Incidentally, you can remortgage six months before your current deal is due to expire. It’s worth keeping in touch with your mortgage adviser so that you know what’s going on in the market.

Seek advice

Speak to an experienced mortgage broker who can advise you on the best options to suit you. We’re here to help, so contact us today.

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