When Should I Remortgage?
If you have a mortgage in the UK, you might be asking, “When should I remortgage?”
Whether you are on a fixed-rate mortgage, a variable mortgage, a residential mortgage, or a buy-to-let mortgage, remortgaging could help you review your monthly payments, switch to a more suitable deal, or support your wider financial goals.
The right time to remortgage depends on your current mortgage deal, interest rates, your financial situation, and your future plans. This guide explains when it might be the right time to remortgage and what UK homeowners and landlords should consider before making a decision.
What Does Remortgaging Mean?
Remortgaging means switching your mortgage to a new deal. This is usually done with a different lender, although some homeowners may also switch to a new product with their existing lender.
The new mortgage deal replaces your old mortgage and may offer:
- A different interest rate
- A fixed or variable repayment structure
- A different mortgage term
- The option to borrow additional funds
- A more suitable arrangement for your current circumstances
For many UK homeowners, remortgaging is something to review before their current fixed-rate mortgage deal ends.
Why Do People Remortgage?
People remortgage for several common reasons. The most suitable reason will depend on your personal circumstances, property plans, and affordability.
Common reasons to remortgage include:
- To look for a better interest rate
- To reduce monthly mortgage payments where possible
- To fix mortgage payments for a set period
- To move away from a standard variable rate
- To release equity from the property
- To borrow extra money for home improvements
- To shorten or lengthen the mortgage term
- To switch between residential and buy-to-let mortgage arrangements
- To review mortgage options after income or credit changes
Remortgaging is not always the right option, but it can be useful when your current deal no longer fits your needs.
When Should You Consider Remortgaging?
The best time to remortgage depends on your current mortgage deal, the wider mortgage market, and your personal financial position.
The table below gives a simple overview.
| Situation | Why It May Be Time to Remortgage | What to Check First |
|---|---|---|
| Your fixed-rate deal is ending | You may move onto your lender’s standard variable rate, which could be higher | Fixed end date, new rates, early repayment charges |
| Interest rates have changed | A new deal may offer more suitable monthly payments or payment stability | Fees, total cost, product terms |
| Your income or credit score has improved | You may qualify for more suitable remortgage options | Credit file, income evidence, affordability |
| You want to release equity | You may be able to borrow additional funds against your property | Loan-to-value, affordability, purpose of borrowing |
| You want to change property use | Residential and buy-to-let mortgages have different rules | Lender criteria, rental income, consent to let |
| You plan to stay in the property long term | A new deal may provide more certainty or flexibility | Future plans, fees, repayment options |
1. Nearing the End of a Fixed-Rate Mortgage Deal
Many UK homeowners choose a fixed-rate mortgage because it gives payment stability for a set period. Fixed-rate deals often last 2, 3, 5, or 10 years.
When the fixed period ends, your mortgage will usually move to your lender’s standard variable rate, also known as the SVR. This rate can sometimes be higher than your previous fixed rate.
That is why many homeowners start reviewing remortgage options before the fixed deal ends.
Example:
Samantha took out a 5-year fixed mortgage ending in September. Her current rate is 2%, but her lender’s standard variable rate is 5%.
She starts looking at remortgage options 3 months before her fixed term ends and secures a new fixed deal. This helps her avoid moving onto the higher SVR.
Tip: Start reviewing your remortgage options around 3 to 6 months before your current fixed-rate mortgage deal expires. This gives you time to compare deals, check costs, and avoid rushing into a decision.
2. When Interest Rates Are Falling
Another time to consider remortgaging is when mortgage interest rates have fallen since you took out your current deal.
If lower rates are available, switching mortgage deals may reduce your monthly payments or help you secure more certainty.
This can be especially relevant if you are currently on a variable mortgage or your current deal is coming to an end.
Example:
Jon has a variable rate mortgage at 4%. The Bank of England lowers interest rates, and some lenders begin offering lower fixed-rate mortgage deals.
Jon decides to speak with a mortgage adviser to see whether switching to a fixed-rate mortgage could give him more predictable monthly payments.
Tip: Variable mortgage rates can rise and fall. A fixed-rate mortgage may offer more certainty, but it is important to compare the full cost, including fees and any early repayment charges.
3. If Your Financial Situation Has Improved
Your financial situation can affect the remortgage deals available to you.
If your income has increased, your credit score has improved, or you have reduced outstanding debts, you may have access to more suitable mortgage options than before.
Lenders usually look at:
- Income
- Employment status
- Credit history
- Existing debts
- Monthly commitments
- Property value
- Loan-to-value ratio
- Affordability
Example:
Emma’s credit rating improved after she paid off credit card debts. Her current mortgage rate is 3.8%, but she may now qualify for a more suitable fixed-rate mortgage.
She contacts a mortgage adviser to review her remortgage options and understand what lenders may offer based on her current circumstances.
4. To Release Equity From Your Property
Some homeowners remortgage to release equity from their property.
Equity is the difference between the value of your property and the amount you still owe on your mortgage.
You may consider releasing equity to:
- Fund home improvements
- Renovate or extend your property
- Support family needs
- Consolidate debts
- Invest in another property
Example:
Mark and Lisa want to extend their home. Their current mortgage is £150,000, and they remortgage to £200,000. The extra £50,000 is used to help fund the extension work.
Releasing equity can be useful, but it increases the amount you owe and may affect your monthly payments. It is important to get qualified mortgage advice before borrowing more against your property.
5. When Changing Property Use
You may need to remortgage if the use of your property changes.
For example, if you move out of your home and decide to rent it out, your residential mortgage may no longer be suitable. In that situation, you may need to switch to a buy-to-let mortgage or speak to your lender about consent to let.
Similarly, if you own a buy-to-let property and later want to live in it, you may need to review your mortgage arrangement.
Example:
David moves out of his flat and wants to rent it out. His current mortgage is residential, so he speaks with a mortgage adviser about switching to a buy-to-let mortgage.
Buy-to-let mortgages have different eligibility criteria, deposit requirements, rental income checks, and interest rates compared with residential mortgages.
What Should You Consider Before Remortgaging?
Before you remortgage, it is important to look beyond the headline interest rate.
A lower rate does not always mean the cheapest or most suitable option once fees and charges are included.
Key things to consider include:
- Early repayment charges
- Arrangement fees
- Valuation fees
- Legal fees
- Broker fees, where applicable
- Monthly repayment amount
- Total cost over the deal period
- Mortgage term
- Loan-to-value ratio
- Flexibility for overpayments
- Your future plans for the property
Early Repayment Charges
Some mortgages include early repayment charges, also known as ERCs.
An ERC is a fee you may need to pay if you leave your current mortgage deal before the agreed period ends. This is common during fixed-rate mortgage deals.
Example:
Rachel’s fixed-rate mortgage has a £2,000 early repayment charge.
If the new remortgage deal saves her only £1,800 over two years, remortgaging early may not make financial sense. She may decide to wait until the ERC period ends.
Always check your current mortgage documents or speak with your lender before applying for a new remortgage deal.
Fees and Costs
Remortgaging can involve several costs.
These may include:
- Mortgage arrangement fees
- Legal fees
- Valuation fees
- Advice fees
- Product fees
- Exit fees from your current lender
Some remortgage deals may come with free valuation or free legal work, but this depends on the lender and product.
When comparing remortgage options, do not only focus on the monthly payment. Look at the total cost over the full deal period.
Your Plans for the Property
Your future plans matter when deciding when to remortgage.
If you plan to sell the property soon, taking a new fixed-rate mortgage could leave you facing early repayment charges if you sell before the deal ends.
If you plan to stay in the property for several years, a new remortgage deal may give you more certainty or help reduce costs, depending on the available options.
Before remortgaging, ask yourself:
- Am I planning to sell soon?
- Do I want to stay in the property long term?
- Do I need payment certainty?
- Do I want flexibility to overpay?
- Do I need to borrow additional funds?
- Could my income or circumstances change soon?
Mortgage Type and Flexibility
Choosing between a fixed-rate mortgage and a variable mortgage is an important part of the remortgage process.
A fixed-rate mortgage gives you more certainty because your payments stay the same for the agreed period.
A variable mortgage may offer flexibility, but payments can increase or decrease depending on the product and wider interest rate changes.
The right option depends on your budget, risk tolerance, and future plans.
How to Start the Remortgaging Process
If you are thinking about remortgaging, it helps to start with a clear review of your current mortgage.
Here are the main steps:
- Review your current mortgageCheck your current interest rate, monthly payment, outstanding balance, fixed end date, and any early repayment charges.
- Check your credit scoreA stronger credit profile may improve the range of remortgage options available to you.
- Compare remortgage dealsLook at fixed-rate mortgage deals, variable mortgage deals, residential mortgage options, and buy-to-let mortgage options depending on your situation.
- Calculate the total costDo not only look at the interest rate. Include fees, charges, and the full cost over the deal period.
- Speak to a mortgage adviserA qualified mortgage adviser can help you understand lender criteria, affordability, and suitable remortgage options.
- Apply for the remortgageOnce you have found a suitable deal, you can submit the application and provide the required documents.
Quick Remortgage Checklist
Before you apply for a remortgage, check the following:
- When does your current mortgage deal end?
- Are there any early repayment charges?
- What is your current interest rate?
- What is your lender’s standard variable rate?
- Has your property value changed?
- Has your income changed?
- Has your credit score improved?
- Do you want to borrow extra money?
- Are you staying in the property long term?
- Do you need a residential or buy-to-let mortgage?
- Have you compared the total cost, not just the rate?
Get Expert Remortgage Advice from BSL Financials
Remortgaging is an important financial decision, and it is not always simple to know the best time to act.
At BSL Financials, we help UK homeowners and landlords review their remortgage options in clear, straightforward language. Whether you have a residential mortgage, buy-to-let mortgage, fixed-rate mortgage, or variable mortgage, our team can help you understand your options before you make a decision.
If you are unsure when to remortgage and want a clearer picture of your options, speak to BSL Financials today.
Our mortgage advisers can help you review your current deal, compare available options, and understand what may be suitable for your needs and goals.
Final Thoughts
So, when should you remortgage?
For many UK homeowners, the best time to start reviewing remortgage options is around 3 to 6 months before a fixed-rate mortgage deal ends. However, you may also want to consider remortgaging if interest rates have changed, your financial situation has improved, you want to release equity, or your property use is changing.
The key is to look at the full picture, not just the interest rate.
A remortgage should fit your budget, property plans, and long-term financial goals.
Please note: This blog post is for informational purposes only and does not constitute regulated financial advice. Always speak to a qualified mortgage adviser before making financial decisions.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Contact BSL Financials to discuss your remortgage options.
