Remortgages

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The average loan size for those remortgaging was £174,685 in June 2019[2]

Take the first steps to remortgaging your home now.

What does it mean to remortgage?

A remortgage means that you switch to a new mortgage with a new lender, or to a different mortgage with the same provider.

If your current mortgage deal has ended, or is ending soon, you could save money by remortgaging rather than paying your lender’s standard variable rate.

You can also remortgage if you’re still in your current deal or if you’re moving house but you’ll need to consider early repayment charges, which can be expensive.

While saving money is the main reason to remortgage, it might be right for you if you want the security of a fixed-rate, if you need to borrow more, or if you need a different type of mortgage, such as one with greater flexibility.

How much can I remortgage for?

This will depend on your individual circumstances, but it only takes a minute to use the MortgageGym eligibility calculator to find mortgages you’re eligible for.

When can I remortgage?

Your eligibility to remortgage depends on:

  • Your credit history. You’ll have to undergo an affordability check, so it’s worth viewing your credit report to check your credit score first
  • The value of your property
  • Whether you’re over 60, retired or self-employed - it might be more difficult for you to get a mortgage if any of these apply

Why remortgage?

There are many reasons why you might choose to remortgage, including:

  1. If your deal is coming to an end

    When your existing mortgage ends you’ll be moved to your lender's standard variable rate.

    If the rate is higher than you paid on your original deal, your monthly payments will increase

  2. You want to borrow more

    If you need to raise funds, you can usually borrow at a lower interest rate than a personal loan by remortgaging

  3. To release equity in your property

    Releasing equity can provide funds for home improvements, debt repayment or retirement income, for example

  4. If you’re worried about interest rates rising

    Remortgaging to a fixed rate means you know exactly what your monthly repayments will be for a set period of time

  5. To find a deal with better interest rates

    Finding a deal with lower interest can reduce your monthly repayments

  6. Getting a more flexible deal

    Some mortgages provide greater flexibility to borrowers, such as the ability to overpay without penalty

  7. To consolidate other debts

    Additional funds can let you consolidate some of your existing debts

  8. If your home’s value has increased

    Increased property values usually means a more favourable loan to value - which often determines the amount you can borrow and the interest rate you’re charged

  9. If you want to switch from interest-only to a repayment mortgage

    Switching to a repayment mortgage can increase your monthly payments but it’ll also mean you can eventually pay off your mortgage

Remortgage costs

If you decide to remortgage, you’ll have to pay these fees during the process:

  • Remortgage fees: The amount you pay your new lender to set up your remortgage
  • Property valuation: What you pay your new lender to evaluate your property’s worth
  • Early repayment charges: If you leave before your contract period finishes, your existing lender will charge you a percentage of your current mortgage
  • Admin fees: This is what you pay your existing lender for forwarding on your title deeds to your solicitor, but not all lenders charge it
  • Legal fees: This is paid to your solicitor to cover the cost of the legal work required to remortgage

Other mortgage options

Repayment mortgages are one of the two types of mortgages available in the UK. With a repayment mortgage, you pay off the interest and borrowed capital each month for a fixed term.

The other type of mortgage is interest only - where you repay the interest on your mortgage for a fixed term. You’ll be responsible for repaying the borrowed capital at the end of the term.

Offset mortgages - a variety of repayment mortgages - deduct the amount of money in your savings account from the amount you pay interest on, so your monthly repayments are lower.

Fixed rate mortgages set the interest rate you have to pay for a certain time period, which can be useful for those wanting to budget.

News and articles on mortgages

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

PLEASE NOTE: THE FCA DOES NOT REGULATE MOST BUY TO LET MORTGAGES

[1]For online mortgage comparison and advice Gocompare.com introduces customers to MortgageGym Limited which is authorised and regulated by the Financial Conduct Authority. Gocompare.com holds a controlling investment in MortgageGym Limited.

[2]LMS Monthly Remortgage Snapshot, June 2019.

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