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Guidance on Choosing When to Remortgage

Deciding when to remortgage can be very tricky! Could you miss out on locking in a low-interest rate, and should I remortgage now? Will rates drop further, and can I remortgage at a more competitive rate in a couple of months?

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2024-06-15
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Guidance on Choosing When to Remortgage

Deciding when to remortgage can be very tricky! Could you miss out on locking in a low-interest rate, and should I remortgage now? Will rates drop further, and can I remortgage at a more competitive rate in a couple of months?

Revolution Finance Brokers often works with clients concerned about how do you remortgage with confidence that you’re not paying over the odds and aren’t moving too soon or too late to take advantage of ideal market conditions.

However, working out how easy is it to remortgage or when to remortgage may be down to your financial objectives, circumstances, and overall situation.

What Does Remortgage Mean UK?

What does it mean to remortgage? The process means you change your mortgage through a new lender or by switching to a different product with the same provider (also called a product transfer).

The problem is choosing when to remortgage to ensure you aren't exiting a fixed-term deal early and attracting settlement penalties or making rushed decisions without an overview of the thousands of potential products on the market.

How do you remortgage and get the best deal? We suggest working with an independent, whole-of-market broker who will navigate the process with you and provide professional guidance.

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Based on your yearly income,
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Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.

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Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.

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Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

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Choosing When to Remortgage

Interest rates aren’t the only consideration, and if you’re unsure when to remortgage, it's important to think about your goals and why you'd like to remortgage.

Should I remortgage because of lower interest rates? Not necessarily; interest rates will always fluctuate. Even if a remortgage looks cheaper on paper, the product fees, legal charges, valuation costs, and application fees might mean it is more expensive.

The best time to decide when to remortgage is if your circumstances mean a remortgage is in your financial interests.

For example, the below scenarios may mean that now is a good point to look at can I remortgage:

  • Your current fixed-rate contract is due to end.
  • You want to fix a stable interest rate during volatility.
  • You can get a better interest rate now than when you originally took out a mortgage.
  • You have sufficient equity in your home to reduce your proportionate borrowing (LTV).
  • You want more flexibility in your mortgage repayments.

Should I remortgage now if I have a good level of equity? We can provide guidance on a case-by-case basis, but if you borrowed an original LTV of 85% and now owe 50% of the balance, you could save yourself a significant amount by remortgaging.

Next, we'll look at these potential situations in more detail to explain how easy is it to remortgage and the pros and cons.

Can You Remortgage at Any Time in a Fixed Deal?

The usual rule of thumb is to avoid remortgaging in a fixed deal because your lender may levy exit charges which can be expensive. Can I remortgage anyway? Yes – you need to understand the fees, though, and build these into your calculations.

Should I remortgage before the end of a fixed period? We normally structure remortgages to coincide with the end of the fixed deal, so you don't switch to the higher SVR interest and don't end up incurring an early settlement charge.

How do you remortgage to get the right balance? You can apply for a remortgage as much as six months in advance, so you are poised to switch at the exact right time.

Should I Remortgage if Interest Rates Are Climbing?

Interest rates have soared over the last few months, and if you are looking at taking out a new mortgage, it will likely cost more. However, should I remortgage is a different question.

In some cases, knowing when to remortgage is more about your circumstances. Still, remortgaging may be favourable if you are worried about further interest rate increases and the impact on your mortgage repayments.

How Soon Can I Remortgage to Release Equity?

How do you remortgage to release equity? If your property has risen in value, or you have paid off a large proportion of your mortgage, remortgaging for a slightly higher value than your current balance could be a viable option.

What does it mean to remortgage to release capital? You add the extra borrowing to the new mortgage balance and can use that cash to pay for other costs.

However, we’re also asked should I remortgage if I have a good amount of equity, and the answer is commonly yes. If you apply for a remortgage at a lower Loan-to-Value (LTV), you may qualify for much lower interest rates or more competitive products.

How Do You Remortgage to Consolidate Debts?

As with our above scenario, if you have built up equity in your property, you can remortgage to consolidate other debts. Should I remortgage now? As interest rates affect mortgage costs, they also make short-term borrowing more expensive.

Knowing when to remortgage can be complex, but you can consolidate other debts into your mortgage and repay one amount monthly at a lower interest rate over a longer term.

Can I Remortgage to Gain Flexibility?

Many borrowers want to make extra repayments, change their monthly payment value, or overpay if they have received a bonus or other income. Can I remortgage to a provider that allows additional payments? Yes, flexibility can be worthwhile if your mortgage does not allow for variances or overpayments.

How to Decide When to Remortgage

If you want to know can I remortgage or when to remortgage to gain the optimal cost savings, please get in touch with Revolution Finance Brokers.

As an independent broker, our expert advisors can evaluate your circumstances, make independent suggestions and help you decide when to remortgage to get the best deal to suit your borrowing needs.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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Frequently Asked
Questions

The right point when to remortgage depends on several variables, such as the mortgage product you currently have, whether you are in a fixed period, and whether your finances and equity mean you are likely to be eligible for a more competitive deal.

If you are wondering should I remortgage now, please get in touch at any time, and we'll discuss your circumstances to provide further guidance.

You can remortgage any time, but there may be better periods than others depending on the lending environment, current product availability, and prevailing interest rates. However, choosing when to remortgage may depend on your requirements, such as needing to remortgage to avoid a more expensive SVR.

Interest rates are likely to change in the months ahead, but making a knee-jerk reaction or worrying about how soon can I remortgage is unlikely to be the best course of action. You can certainly decide when to remortgage if your current product is becoming more expensive, but an independent broker can make tailored recommendations so you understand all the options.

Yes, an experienced broker can work with you to compile a complete application with all the supporting information a remortgage lender needs to provide a speedy answer. Remortgages can take between four and eight weeks, although we can usually expedite the process.

If your monthly mortgage costs have risen, should I remortgage may be an easier question to answer! Even when interest rates are high, a fixed-term deal with another lender may be favourable, particularly if you are paying the SVR with your existing product.

Remortgaging is relatively straightforward, provided you understand how do you remortgage, know when to remortgage to negotiate the best deal, and have all the documentation to hand to work through the lender’s eligibility assessments.

However, we appreciate that for many borrowers, working out how do you remortgage is complex and confusing, and we are always on hand to explain each stage or help you make informed decisions about the right ways to move forward.

Remortgaging means you pick a new product or move to a different lender, repaying your current mortgage and replacing it with an alternative agreement. You can remortgage for many various reasons, and timing may be important if you are unsure when to remortgage because of a forthcoming end in a fixed-term deal.

Most people can remortgage within one to two months. Still, there are many reasons the process could take a little longer than anticipated – normally due to missing information, queries from the lender, or gaps in your proof of affordability.

Remortgaging means switching from your current mortgage deal to an alternative, although you might decide to stay with the same lender but shift from your current product to a more competitive offer.

Theoretically, yes, you can remortgage at any point you wish to. There could be favourable moments to remortgage when interest rates are low or before you reach a fixed-term end date. However, other factors may mean deciding when to remortgage depends more on your requirements or financial circumstances.

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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