Remortgage

What is needed for a remortgage?

Not quite as much information as for a mortgage, normally. A lot of lenders will only require one payslip. That said, I’ve done one this week where they wanted three. Each lender is slightly different.

If you’re remortgaging through a broker, you would be governed by our compliance and anti-money laundering rules. We like to see three payslips and three months’ bank statements, plus ID.

In many cases, the lender doesn’t require quite as much information. They often do automated or desktop valuations, so an applicant doesn’t have that intrusive surveyor coming round to price up their home. It can be more streamlined in what’s required than a purchase.

Is it better to sell or remortgage?

If you’re wanting to stay in your current property and the deal you’ve taken is coming to an end, you might stay with the same lender and renegotiate, which is called a ‘product transfer.’

Alternatively you’d remortgage to a different lender, especially if they’re offering a better interest rate. If you’re wanting to sell, that’s fine, but you wouldn’t remortgage and then sell because you’re likely to have early repayment charges.

Can I remortgage with the same lender?

It isn’t called a remortgage if you stay with the same lender. If I’m with Halifax, my deal ends and I stay with Halifax, that’s a product switch or a product transfer. I take a new rate and stay with them. A remortgage means you’re going to a different lender.

How long does a remortgage take? How long is the process?

I arranged a remortgage for one of my existing clients at 9.30 this morning and I had the application done by 10.15am. I had all the documentation and did the initial checks. The lender checked the payslips I uploaded for that client and did an automated valuation. It’s 1.20pm at the moment and I’m expecting an offer later today.

A lot depends on how you package it. In this particular case, the client’s actually tied into penalties on their mortgage until 30th April, but we’re arranging the mortgage now. He was contemplating moving house, but decided not to and asked me to arrange a two-year product.

We looked at staying with his existing lender, which was quite expensive, so it was cheaper to remortgage. I arranged that this morning, but the new product won’t start until 1st May.

We’re recording this in February 2026, and over the last three or four years interest rates have been incredibly volatile. Over the last 18 months or so, they have been coming down, but there have been specific times when rates have increased quite sharply – including the last two weeks.

We’re hoping that’s ended and they may come down a little. We recommend arranging a new remortgage or product transfer as early as possible – normally six months before your current deal comes to an end.

Then, we can put a ceiling on the maximum interest rate. If I submit a mortgage today at 3.9%, but interest rates increase between now and your mortgage ending, you will still only be paying 3.9% because we’ve submitted the application.

If interest rates come down, however, perhaps to 3.7% or 3.6%, I would automatically amend your rate to always ensure you’re on the most cost-effective one.

In the last two weeks, interest rates have increased by about 0.25% and a number of clients have asked if they should remortgage now or hang on. But it looks like they’re going to come down. One rate is just over 4% now – a month ago it would have been 3.7%.

How many times can you remortgage?

It depends what product you’re taking. If you choose a five-year fixed rate, you wouldn’t review that mortgage within the next five years because there would be penalties. Then, six months before your deal ends, at four and a half years, I’d be knocking on your door to lock in a new rate for you.

If you take a two-year fixed rate, again, after 18 months, I’d be looking at the right option for you. There isn’t a maximum time – it depends what product you’ve taken.

Is it worth remortgaging every two years?

Again, it depends on your circumstances. I’ve been chatting today to a client who’d initially chosen a two-year fixed rate. This is on a purchase rather than a remortgage, and he’s due to complete in the next six weeks.

But there’s a possibility they may come into some money. So we’re going to swap to a tracker rate mortgage, because that doesn’t have any early repayment charges. The right product for you is always something we would discuss.

If your intention is to stay in the house for a long while and interest rates are quite attractive, you’d probably look at a five-year deal. If they are a bit expensive and look like they could come down, you might choose a two-year product.

With a two-year deal, you get more flexibility to review your mortgage, but you’ve always got the worry that rates will have increased and so your payments go up rather than down. But in the last few years they have been coming down, with a couple of sharp increases, as we’re seeing now.

How much can I borrow from a remortgage? Can I borrow more money on my mortgage without remortgaging?

If I’m two years into a five-year fixed rate, I don’t want to come away from that lender and remortgage with another. I would instead approach my existing lender for a further advance.

That lets me borrow more money against the value of the property from my own lender, which is often the most cost-effective way of doing it. That’s a further advance rather than a remortgage.

With regards to how much you can borrow, it’s down to why you’re borrowing it and the Loan to Value – the equity you’re leaving in the property. Certain lenders won’t do debt consolidation, for example, and others will only go up to a certain amount of money, typically £50,000.

Some lenders only allow you to borrow up to 85% of the property value. So if you had a £50,000 mortgage and your house was worth £100,000, you could only go up to 85%, which is £85,000. With others, you could go up to 90% or, in one case, 95%. Each lender is slightly different with their criteria.

This is where you’d reach out to a mortgage advisor and chat through the circumstances. What do you need the money for and how much do you need? We would then work out the most appropriate lenders.

Do payments go down when you remortgage?

Possibly. It depends what rate you’re on and what they are in the market when you come to the end of your deal.

If you took your mortgage out two years ago in February 2024, the interest rate will have been about 5.5%. Currently, they are just a bit under 4%. Therefore, your payments will come down.

That said, if you’d taken a mortgage out five years ago and it’s just coming to an end, you would have been on 1.5% to 2%. So with current rates at 4%, your payments will be increasing rather than decreasing.

Can I overpay when I remortgage?

Yes, and with most lenders, you can overpay your mortgage at any stage, not just when you remortgage. But a remortgage is a great time to do it if you’ve got some savings and haven’t been overpaying on a regular basis.

You can generally overpay your mortgage by 10% per annum. So if you have a £100,000 mortgage, you can overpay by £10,000 a year. One lender allows 20% overpayment, but the majority is 10%.

I’ve got a client that completed a remortgage a month ago, and they were paying £60,000 off their mortgage, which is a nice position to be in. That was over the 10%, so they waited until they weren’t tied into the rate. Their deal ended on 31st December, and we completed the remortgage on 10th January to give them time to pay the £60,000 off before it started.

Do you get a lump sum when you remortgage?

You don’t necessarily get a lump sum unless you’ve borrowed more money. So if you’ve borrowed another £10,000 for home improvements, once it completes, you’ll get £10,000 as a lump sum.

Again, it depends what you want to borrow the money for and how much, but you potentially can do it.

What happens if rates drop after I lock?

It’s tough luck, unfortunately. Interest rates rise and fall on a daily basis. If you tie in at 5% for two years, that’s what you pay. If you come out of it, you pay early repayment charges. It’s just a case of waiting until your deal ends, and hopefully it’s cheaper. On the other hand, if rates increase, you’re doing quite nicely.

Can you be denied a remortgage? Why would this happen?

Yes, for exactly the same reasons as a mortgage. It could be that you’ve got missed or late payments on your credit file. It may be that the lender thinks the value of the property isn’t as high as you’re planning to pay, which happens quite a lot.

It could be that your income isn’t acceptable – you’ve still got to go through the same income and affordability checks.

There are a number of potential reasons, but a mortgage broker will hopefully put you with the right lender, first time. We don’t want to see mortgages get declined – it means we have to do more work.

We select the right lender for that client. It might not necessarily be the most cost-effective, but there’s no point approaching a cheaper lender if they’re going to decline it. We take the path of least resistance, where we know it will go through, and at the right cost.

A lender on a remortgage might not go to 90%, and only to 85%. If we need 90% lending, there’s no point in us going to that lender because they will refuse it. This is where a lot of applicants come unstuck with arranging a mortgage direct. Nationwide declines them, then Halifax declines, but we would never approach those because they don’t go up to 90%. We’d use a lender that goes up to 90%.

You’ve demonstrated throughout our two episodes how a mortgage broker can help. Any final thoughts?

If you’ve got a relationship with a good mortgage broker, a lot of these questions wouldn’t necessarily come up. Your broker would know what they were doing and lead you down the right path to the right lender.

Key Takeaways:

• Start the remortgage or product transfer process early, ideally six months before your current deal expires, to lock in a maximum interest rate while reserving the option to take a lower rate if rates fall.
• A ‘remortgage’ is switching your mortgage to a different lender, while remaining with your existing lender to take a new rate is called a ‘product switch’ or ‘product transfer.’
• If you are tied into a fixed rate and wish to borrow more money, approaching your current lender for a further advance is often the most cost-effective way to avoid early repayment charges from a full remortgage.
• The remortgage application process is often more streamlined than a purchase mortgage, frequently involving automated or desktop property valuations, and can be completed very quickly.
• A good mortgage broker helps ensure your application goes to a suitable lender whose criteria -such as their maximum Loan to Value percentage – align with your needs, thereby minimising the risk of a decline.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.