Remortgage FAQs

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Remortgage FAQs

Moving your mortgage, or remortgaging, is easier than ever before. The competitive UK mortgage market, not to mention the constant fluctuation of interest rates, means that remortgage options are greater than ever before. However, thousands of borrowers throughout the UK continue to pay over the odds for their loan due to misunderstanding over the remortgage process.

Can moving my mortgage save me money?

Moving your mortgage loan could save you money. Throughout the UK, numerous borrowers pay too much for their mortgage loans because they have allowed their mortgage deal to revert to a lender's standard variable mortgage rate. Switching your mortgage to a cheaper deal is one of the most effective ways of saving money.

What is the cost of remortgaging?

Taking out a remortgage doesn't have to be expensive, and many mortgage lenders now provide specialist remortgaging services. Some of these charge no fee for legal and arrangement costs.

Can I use a remortgage to borrow more money?

It is possible to use a remortgage to free up equity stored in your home. Moving your mortgage, as well as reducing the amount you pay each month, could let you free up capital. Borrowing on a remortgage could give you cheap rates, but remember the loan is secured against your home.

Are there any problems with remortgages?

The only potential problem, beyond affordability, is that the terms and conditions of your existing mortgage loan could mean that you are tied in for a fixed rate of time, and have to pay a redemption charge in order to changes deals early. This type of fee is usually known as an early repayment charge.

Shouldn't I just stay with my mortgage lender rather than move my mortgage?

Many borrowers feel a loyalty to their lender, yet mortgage lenders usually do not reward customer loyalty. Therefore, shopping around for a cheaper loan is the best way to save money, either through searching the market yourself, using the Internet, or going through a mortgage broker.

Which type of remortgage deal is best for me?

Four types of deal: fixed, capped, discounted and flexible, are most common. The most suitable mortgage will depend on your individual circumstances.

What should I watch out for on the remortgage market?

Avoid lenders who charge extended redemption penalties. These small-print lurkers can really sting you when it comes to changing your deal next time.

How does the remortgage process work?

When it comes to taking out a remortgage, the first step is to get a 'redemption statement' from your mortgage lender. This tells you how much you still owe. You then need to apply to your new lender of choice, with proof of income and identity. At this point, the new lender will value your home and arrange your mortgage, both of which can prove expensive.

How long does a remortgage take?

Depending on the specifics, remortgages generally take about a month.