How to Remortgage

Now you know the advantages remortgaging can bring such as lower rates or adding flexibility, you need to know how to go about remortgaging. There is a series of questions

Am I Eligible?

Eligibility is simply a case of, ‘does it make sense?’. For example, if you only took out your current mortgage a month ago and are tied into a 3 year fixed rate mortgage, it is likely that the fee’s would negate any saving made by improved rates and flexibility.

Eligibility therefore is a case of financial reasoning and timing. How much do I currently pay, how much would it cost me to leave my lender (early repayment fees & extended early repayment fees) and what am I likely to save by remortgaging.

A simple review of the most common headline rates and fee’s  will be enough of a guide to check your eligibility on a financial basis.

NOTE: In most cases remortgaging will involve changing lenders. Though it is possible to remortgage with your current lender, the best deals are usually found from new lenders as their products will be positioned to pinch business from expiring mortgage products. Remortgaging to another product offered by your current lender is referred to as ‘switching’

Remember -Your loyalty is not rewarded

What mortgage type do I need?

As discussed in our “why remortgage” pages, you may want to remortgage to save money, to add flexibility or both. It is important to understand what mortgage product type suits your needs for example fixed rate, variable rate or a flexible mortgage.

Mortgage Types can be broken down into 7 main categories:

Each type offering different advantages and disadvantages. For an in depth understanding of each mortgage type, click its name to read a full description.

Do I need Flexible Features?

When remortgaging, it is important to consider if you require flexible features. Flexibility can come in one of two ways, a Flexible mortgage or a standard mortgage with flexible features.

Flexible mortgages, i.e. mortgages that are centred around their flexibility rather than rates, generally feature higher rates than the other mortgage types and, as such should only be used if absolutely necessary. Most mortgage lenders now offer traditional mortgages with the most popular of flexible features added.

Instruct a Broker or Search the Market

The final step to completing your remortgage is the actually identifying and taking up a new mortgage product.

Here again you have a couple of choices, do the leg work yourself or get a mortgage broker to search for you.

We encourage those looking to remortgage to have a good look around themselves to see the kinds of rates and fee’s available for your desired mortgage type, it is the best way to understand where the mortgage market currently is. However, we recommend that all those but the extremely financial astute to instruct a mortgage broker.

Mortgage brokers can offer you a wide variety of mortgages that are suited to your needs and give you figures to show their costs allowing you to make ‘apples to apples’ comparisons on the mortgages. Furthermore many mortgages brokers will be able to get better than advertised rates or reduced fee’s due to relationships with the lenders, allowing you to further still reduce your mortgage outgoings.

To find out how to choose a mortgage broker, read our choosing a mortgage broker page.