A quick overview of remortgages
Remortgaging either refers to moving your existing mortgage from one lender to another, or renewing a mortgage with your current lender. The latter scenario is commonly referred to as a product transfer, and can be more straightforward than moving to a new lender.
Read more about how the process works in our complete guide to remortgages.
Why people choose to remortgage
People usually refinance their property for the following reasons:
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To avoid ending up on their lender’s Standard Variable Rate (SVR)
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Secure a lower interest rate that’s available elsewhere
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Borrow extra against the equity in their property
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Make changes to an existing mortgage, such as the product type and term length
Releasing equity from your home
When you remortgage you will have the option to release any equity you have built up during the mortgage term. Whether your request is approved will depend on the reason you need the funds and the loan-to-value (LTV) ratio.
The LTV requirements can vary depending on why you need to release equity, as shown in this table.
|
Reason for Releasing Equity |
Typical LTV Cap |
|
90% |
|
|
75-85% |
|
|
75-85% |
|
|
60-85% |
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FAQs
While some remortgage deals are "fee-free," potential costs can include:
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Arrangement Fee: Paid to the lender for the product (can often be added to the loan).
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Valuation Fee: For the lender to assess your property’s value.
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Legal Fees: For a solicitor to handle the paperwork (often free with standard remortgages).
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Exit Fees/Early Repayment Charges (ERCs): Payable to your current lender if you leave before your deal ends.
Find a better remortgage deal with Money Helpdesk
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
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