Published: 28 June 2024
Heard your neighbours talking about remortgaging their home or seen a news article discussing it? The term “remortgage” might feel familiar but how much (or little) do you know about what the remortgaging process is?
Don’t worry, we’re here to answer some questions around remortgaging – you’ll be clued up in no time!
What's remortgaging?
Remortgaging is when you move your mortgage from one lender to another. But instead of moving properties, you continue living in the same one!
What's the process of remortgaging?
Remortgaging a home is usually considered when your current mortgage product is coming to an end. And if this is the case, it can mean your monthly repayments can go up (or down)!
On the other hand, you might remortgage to raise more money for pricier home improvements, like a spacious loft conversion or a new conservatory.
But remember, if you can’t afford the payments for your new remortgage, your home could be repossessed if you don’t keep up your mortgage repayments. So, it’s a decision you’ll need to think through.
Can you remortgage at any time?
Wondering when to start the remortgage process? Well, you can typically remortgage whenever you like, but there are a few things to keep in mind before you jump-start remortgaging your home! These include:
- When your current mortgage is expiring
Before you start the process of remortgaging, you’ll need to find out when your current mortgage product expires. This gives you a good idea of when you’re free to remortgage.
- Early repayment charges
If your mortgage product hasn’t expired yet, you can still remortgage your home – but you’ll need to read the terms and conditions first to understand if there are any applicable charges. For example, some mortgage products involve early repayment charges, so read your terms and conditions with a fine toothcomb before doing anything.
- Remortgaging terms
You’ll need to meet a lender’s exact remortgaging terms and criteria to lock in a new mortgage deal.
This is essential, and your remortgaging terms will include:
- Your property’s value
- Your income (e.g. your outgoings, income, liabilities)
- Your credit score
The remortgage process timescale
Everyone’s experience (and timescale) varies when it comes to remortgaging; one size doesn’t fit all! It’ll depend on your lender, existing mortgage, and your current circumstances.
On completion of the remortgage, you’ll be placed on a new mortgage deal which could involve two new, key changes to your term and interest rate.
And there are four key stages involved when remortgaging your home:
- Completing an Agreement in Principle (AiP)
An Agreement in Principle (AiP) helps you understand how much money a lender can offer you to remortgage without needing a full credit check. And to make things easier, many lenders now offer this service online for you to fill out!
One thing to bear in mind, though, is that the AiP doesn’t guarantee that you’ll be approved for a remortgage. But it will help you understand the options available to you.
- Evaluating the costs
When remortgaging your home, there are some standard costs you’ll need to prepare for before you make the leap. These can include:
- Arrangement fees – the new mortgage product fee (also named “product fees”)
- Early repayment charges – a charge for ending your current mortgage product early
- Legal fees – such as conveyancing fees (but usually lenders will pay this)
- Booking fees – if your lender charges a booking fee to secure a fixed rate
- Exit fees – for exiting from your current mortgage product early (or with a different lender)
- Valuation fees – many remortgage lenders offer this for free but if they don’t, you’ll need to budget for them
It’s important to take these costs seriously so you can work out if remortgaging your home suits your current budget.
- Start your new mortgage application
When you’ve received your AiP, it’s time to apply for your remortgage. At this stage, you’ll need to make sure you have documented evidence of your salary, as well as any paperwork showing any loans/credit contracts you have.
- Finish your remortgage
Now it’s time for your new lender to carry out the necessary credit checks. This is done to review your current circumstances and work out whether your new mortgage product is affordable for you.
The lender will also organise a valuation of your home, and then you’ll need a solicitor/conveyancer to arrange a transfer of your new mortgage.
How long does it take to remortgage?
The remortgaging process can take around 4 to 8 weeks, but this can really vary.
Like most things, the remortgaging timeline isn’t the same for everyone, mainly because of things outside of your control. But sometimes this can mean it’s quicker than expected, it just depends.
How many times can you remortgage?
Technically speaking, there’s no limit on how many times you can remortgage your home. So, if you’re wanting to remortgage multiple times, you can do. Just make sure you have a good think about what we’ve discussed before remortgaging repeatedly!
When should you start the remortgage process?
Did you know you can agree to a new mortgage rate six months before your existing mortgage deal ends? So, if you’re keen to remortgage, you can start the process as soon as possible. But this does depend on your current lender’s terms and conditions.
Want to keep learning?
Now you’re all clued up on remortgaging, you might want to find out more. If you do, just contact us to chat to a member of our friendly team!
This guide is intended as a summary only and doesn’t constitute legal or financial advice given by Leeds Building Society. No reliance should be placed on this guide.
We recommend that you seek independent legal advice and/or financial advice if you have any questions or queries.
