Remortgaging means replacing your current mortgage with a new one on the same property. This is one of the most common financial moves homeowners make, typically done when an initial fixed or discounted rate period ends and the mortgage reverts to the lender's standard variable rate (SVR), which is usually higher.
People remortgage for several reasons: to secure a better interest rate and reduce monthly payments, to release equity from their home for purposes such as home improvements or debt consolidation, to switch from interest-only to repayment, or to consolidate other debts into a single lower payment.
The remortgage process involves applying to the new lender, having the property valued, and having a solicitor handle the legal transfer of the mortgage. Some lenders offer free valuations and free legal work to attract remortgage customers. The typical process takes 4 to 8 weeks, and you can usually start the process up to 6 months before your current deal expires.
Your 2-year fixed rate at 3.5% is ending next month and will revert to the SVR of 6.75%. You have £180,000 remaining on a property worth £300,000. You remortgage to a new 5-year fix at 4.2%, reducing your monthly payment from £1,166 (SVR) to £969, saving £197 per month or £2,364 per year.
Key Points
- Switching your mortgage to a new deal without moving home
- Most commonly done when a fixed or discounted rate period ends
- Can be used to secure a better rate, release equity, or change terms
- Start the process up to 6 months before your current deal expires
- Check for early repayment charges before switching mid-deal