UK Remortgage Guide 2025

What is Remortgaging?

Remortgaging involves switching your existing mortgage to a new deal, either with your current lender (product transfer) or moving to a different lender. It's one of the most effective ways to reduce your monthly payments, access better terms, or release equity from your property. Use our remortgage calculator to estimate your potential savings.

When to Consider Remortgaging

End of Initial Deal Period

The most common time to remortgage is when your initial fixed, tracker, or discount rate period ends and you revert to your lender's Standard Variable Rate (SVR).

Key Remortgaging Triggers

Types of Remortgaging

Product Transfer (Same Lender)

Pros: Quick process, no legal fees, no valuation required, no affordability reassessment

Cons: Limited to current lender's rates, may not be most competitive, fewer product options

Full Remortgage (New Lender)

Pros: Access to whole market rates, potentially significant savings, better terms and features

Cons: Legal fees, valuation costs, full application process, 6-12 week timeline

Calculating Potential Savings

Factors Affecting Savings

• Current vs. New Rate: Larger rate differential = greater savings. Check current interest rates
• Outstanding Balance: Higher balances amplify savings. Use our repayment calculator
• Remaining Term: Longer terms spread costs over more payments
• Remortgage Costs: Legal fees, valuation, arrangement fees. See mortgage fees guide
• Early Repayment Charges: Cost of leaving current deal early. Learn about early repayment

Break-Even Analysis

Calculate how long it takes for savings to exceed remortgaging costs:

Break-even period = Total costs ÷ Monthly savings

If break-even is under 18-24 months, remortgaging usually makes financial sense.

The Remortgaging Process

Improving Your Remortgage Prospects

Credit Score Enhancement

• Check credit reports 3-6 months before application. See our adverse credit guide
• Pay all bills on time leading up to application
• Reduce credit card balances to below 30% of limits
• Avoid new credit applications before remortgaging

Income Optimization

• Ensure payslips reflect any recent salary increases
• Document regular overtime or bonus payments
• Maintain employment stability for 6+ months
• Prepare self-employed accounts well in advance

Property Value Maximization

• Complete minor improvements before valuation
• Ensure property is well-presented for surveyor
• Provide evidence of local sales if beneficial
• Consider formal valuation if major improvements made

Common Remortgaging Challenges

Affordability Issues

Since 2014's affordability rules, remortgaging can be more challenging:

• Reduced income: Job changes, reduced hours, or career breaks
• Increased expenses: New dependents, debt, or higher living costs
• Interest rate stress testing: Must afford payments at higher rates
• Age limits: Approaching maximum age limits for some lenders

Property Issues

• Negative equity: Property worth less than outstanding mortgage
• Down valuations: Lower than expected property valuations
• Lease problems: Short leases or ground rent issues on flats
• Property defects: Structural issues identified during survey

Market Conditions

• Rising rates: Market rates higher than current deal
• Lender appetite: Reduced lending in certain areas or property types
• Economic uncertainty: Stricter lending criteria during downturns
• Brexit/political factors: Market volatility affecting availability

Costs of Remortgaging

Unavoidable Costs

Potential Additional Costs

• Early Repayment Charges: 1-5% of outstanding balance if switching mid-term
• Broker Fees: £500-£1,500 if using mortgage broker
• Higher Lending Charges: For high LTV remortgages
• Buildings Insurance: May need to change insurer

Special Remortgage Situations

Negative Equity

If your property is worth less than your outstanding mortgage:

• Limited lender options available
• Consider staying with current lender for product transfer
• Wait for property values to recover if possible
• Make overpayments to reduce balance below property value

Self-Employed Remortgaging

• Prepare 2-3 years' accounts or SA302 forms
• Use specialist self-employed lenders if needed
• Consider timing around strong financial years
• Document any contract renewals or pipeline work

Buy-to-Let Remortgaging

• Different affordability criteria based on rental income. See our BTL mortgage guide
• Typically require 125-145% rental cover
• Higher interest rates than residential mortgages
• Additional tax considerations for landlords

Later Life Remortgaging

• Some lenders have maximum age limits (70-85)
• Consider retirement income implications
• Explore lifetime mortgages as alternative
• Seek specialist later life lending advice

Expert Remortgaging Tips

Timing Your Application

• Start research 6 months before current deal expires
• Submit applications 3-4 months before expiry
• Allow extra time during busy periods (spring/summer)
• Consider rate rise environment when choosing deal length

Negotiating Strategies

• Use competitive offers to negotiate with current lender
• Consider product transfers if rates are competitive
• Factor in all costs, not just headline rates
• Negotiate on arrangement fees and other charges

Long-term Planning

• Consider overpayment facilities for future flexibility
• Think about changing circumstances (retirement, children)
• Balance rate security with potential for future savings
• Maintain good credit throughout mortgage term

Frequently Asked Questions

When is the best time to remortgage in the UK?

The optimal time to remortgage is 3-6 months before your current fixed-rate deal expires. This gives you enough time to research the market, submit applications, and complete the process before reverting to your lender's Standard Variable Rate (SVR), which is typically 2-3% higher than competitive fixed rates. For a £200,000 mortgage, staying on SVR could cost an extra £300-£400 per month. Start your research 6 months early to compare rates, but submit applications 3-4 months before expiry to account for the 6-12 week processing time. However, you might also consider remortgaging mid-term if market rates have dropped significantly - even with Early Repayment Charges (ERCs) of 1-5%, the long-term savings could outweigh the penalty. Calculate your break-even point: if monthly savings exceed total costs (ERCs + remortgage fees) within 18-24 months, it's usually worth switching early.

How much does it cost to remortgage in 2025?

Typical remortgaging costs in 2025 range from £500 to £2,000, depending on whether you switch lenders or stay with your current one. For a product transfer (staying with your current lender), costs are minimal: £0-£500, usually just a small arrangement fee, with no legal fees or valuation required. For switching to a new lender, expect: Legal fees £300-£800 (though many lenders offer free legal work), valuation £150-£1,000 (often free with certain deals), arrangement fee £0-£2,000 (can sometimes be added to the mortgage), and exit fees £50-£300 from your current lender. Additional costs may include: Early Repayment Charges (ERCs) of 1-5% of outstanding balance if switching mid-term (e.g., £5,000 on a £200,000 mortgage with 2.5% ERC), broker fees £500-£1,500 if using an advisor, and higher lending charges for high LTV remortgages. Many lenders offer incentives like free valuations, free legal work, or cashback (£250-£1,000) to offset costs. Always factor these into your comparison - a slightly higher rate with no fees might be better than a lower rate with £2,000 in costs.

Can I remortgage if my property value has decreased?

Yes, but it's more challenging if you're in negative equity (owing more than your property is worth). If your property has decreased in value but you still have equity, you'll simply move into a higher Loan-to-Value (LTV) band, which means higher interest rates. For example, if you originally had 80% LTV but now have 85% LTV due to property value decline, you'll pay 0.2-0.5% more in interest. If you're in negative equity, your options are limited: Most new lenders won't accept you, so consider a product transfer with your current lender - they don't require a new valuation and often offer competitive rates to retain customers. Wait for property values to recover if possible, monitoring local market trends. Make overpayments to reduce your balance below the property value - even £5,000-£10,000 can make a difference. Some specialist lenders offer negative equity mortgages, but rates are significantly higher (1-2% above standard rates). If you must move house while in negative equity, you may need to bring cash to the sale to cover the shortfall, or explore portable mortgages that allow you to transfer your existing deal to a new property.

What's the difference between remortgaging and a product transfer?

A product transfer means switching to a new mortgage deal with your existing lender, while remortgaging typically refers to switching to a completely new lender (though the term is sometimes used for both). Product transfers are faster (1-2 weeks vs 6-12 weeks), cheaper (£0-£500 vs £500-£2,000), and simpler - no legal work, no valuation, no full affordability assessment, and no credit checks in most cases. However, you're limited to your current lender's rates, which may not be the most competitive. Product transfers are best when: Your current lender offers competitive rates, you need to switch urgently (deal expiring soon), you have affordability concerns that might fail a full assessment, or you're in negative equity or have a unique property. Full remortgaging to a new lender offers access to the whole market (potentially 0.5-1% better rates), better terms and features (overpayment facilities, offset options), and the ability to borrow additional funds. It's best when: You have time (3-6 months before deal expiry), your current lender's rates aren't competitive, you want additional borrowing, or you need specific features. Many people compare both options: get a product transfer quote from your current lender, then compare it against whole-market remortgage options to see which offers better value after accounting for all costs.

Will I need a new mortgage valuation when remortgaging?

It depends on whether you're doing a product transfer or switching lenders. For product transfers (staying with your current lender), no new valuation is required - your lender already knows the property and will use their existing records or automated valuation models (AVMs). For switching to a new lender, a valuation is almost always required, costing £150-£1,000 depending on property value and type. However, many lenders offer free valuations as part of their remortgage deals, especially for properties under £500,000. The valuation process: The new lender instructs a surveyor (you can't choose them), the surveyor visits for 15-30 minutes to assess condition and value, and the report goes directly to the lender (you don't see it unless you pay extra). Valuation risks: Down-valuation - if the surveyor values your property lower than expected, your LTV increases and you may not qualify for the rate you applied for. For example, if you expected £300,000 but it's valued at £280,000, your 75% LTV becomes 80% LTV, potentially costing 0.3-0.5% more in interest. Property defects - serious issues (subsidence, structural problems, Japanese knotweed) can lead to mortgage rejection or require expensive repairs before approval. To minimize risks: ensure your property is well-presented, provide evidence of recent local sales if beneficial, and consider getting an independent valuation first if you've made major improvements or are in a volatile market.

Can I remortgage to release equity from my home?

Yes, equity release remortgaging (also called further advance or additional borrowing) allows you to borrow against the increased value of your home or the amount you've paid off. This is common for home improvements, debt consolidation, or major purchases. How it works: If your property was worth £250,000 with a £200,000 mortgage (80% LTV), and it's now worth £300,000 with £180,000 outstanding (60% LTV), you could potentially borrow up to 80-85% LTV (£240,000-£255,000), releasing £60,000-£75,000 in equity. Typical uses: Home improvements (extensions, renovations) - often add more value than they cost. Debt consolidation - replacing high-interest credit cards (18-25% APR) with mortgage rates (4-6%), but extending the term significantly increases total interest paid. Buying a second property or investment - using equity as a deposit. Helping children onto the property ladder. Key considerations: Higher borrowing means higher monthly payments - ensure affordability. Extending your mortgage term to keep payments manageable means paying more interest overall. Lenders will assess affordability based on your current income and expenses. You'll pay remortgage costs (£500-£2,000) plus potentially higher interest rates for higher LTV. Alternative: Some lenders offer further advance products (borrowing more from your current lender) which can be quicker and cheaper than a full remortgage. Risks: You're increasing your debt secured against your home - if you can't pay, you could lose your property. Consider whether the borrowing is for an appreciating asset (home improvements) or depreciating expense (holiday, car).

How does remortgaging affect my credit score?

Remortgaging involves a hard credit check which temporarily reduces your credit score by 5-10 points, but the impact is minimal and short-lived if managed properly. The credit check process: When you apply for a mortgage, lenders perform a hard search that appears on your credit file for 12 months (visible to other lenders for 6 months). Multiple applications within a short period (2-4 weeks) are usually treated as a single search for mortgage purposes, so comparing rates won't severely damage your score. Your score typically recovers within 3-6 months if you maintain good credit behavior. Positive impacts of remortgaging: Successfully remortgaging and making regular payments improves your credit history. Paying off your old mortgage and starting a new one shows you can manage large debts responsibly. If you use equity release to consolidate high-interest debts, reducing your credit utilization ratio (below 30%) significantly improves your score. Negative impacts to avoid: Missing payments on your current mortgage before remortgaging can reduce your score by 50-100 points and jeopardize approval. Applying to multiple lenders over several months (rather than within a short comparison period) creates multiple hard searches. Being rejected for a remortgage can lower your score and make future applications harder. Best practices: Check your credit report 3-6 months before applying and correct any errors. Use soft search tools (eligibility checkers) that don't affect your score to compare rates. Apply to multiple lenders within a 2-4 week window if comparing. Maintain perfect payment history on your current mortgage leading up to the application. Avoid new credit applications (credit cards, loans, car finance) for 3-6 months before remortgaging.

What happens if I'm refused a remortgage?

Being refused a remortgage doesn't mean you're stuck - you have several options depending on the reason for rejection. Common rejection reasons and solutions: Affordability issues (income too low, expenses too high) - Consider a product transfer with your current lender (no affordability reassessment required), reduce your borrowing amount or extend the term to lower monthly payments, wait 6-12 months to improve your income or reduce expenses, or add a co-applicant (partner, family member) to increase household income. Credit problems (missed payments, defaults, CCJs) - Wait for adverse credit to age (6-12 months makes a significant difference), use specialist adverse credit lenders who accept lower credit scores, consider a guarantor mortgage where a family member guarantees payments, or improve your credit score over 6-12 months before reapplying. Property issues (down-valuation, structural defects, short lease) - Challenge the valuation with evidence of recent local sales, fix identified defects before reapplying, extend a short lease (under 80 years) before remortgaging, or use specialist lenders for non-standard properties. Employment issues (self-employed, contractor, recent job change) - Provide additional documentation (contracts, pipeline work, accountant's reference), wait until you have 2-3 years of accounts if self-employed, use specialist self-employed lenders, or consider guarantor mortgages. What to do next: Don't immediately reapply with multiple lenders - this creates multiple credit searches and further rejections. Request detailed feedback from the lender on why you were rejected. Consider using a mortgage broker who can identify the specific issue and recommend suitable lenders. If your current deal is expiring, arrange a product transfer as a temporary solution while you address the rejection reasons. Worst case scenario: If you can't remortgage and your deal expires, you'll revert to your lender's SVR (typically 2-3% higher). While expensive, this gives you time to improve your situation without the pressure of an immediate deadline.