Remortgages account for around a third of all new mortgage commitments each year, and a 2023 survey carried out by Confused.com found that almost 9 out of 10 respondents had remortgaged in the last 5 years – so it’s common and something the average borrower is likely to do more than once.
People remortgage for a variety of reasons, including:
- Their current fixed-rate deal is coming to an end, and they want to move to the best new available product.
- They have a good amount of equity in the property and want to increase their borrowing to release some of it – either to spend or reinvest elsewhere.
- Their property has increased enough in value that they can remortgage at a lower loan to value and therefore lower interest rate, to reduce their monthly payments.
If you’re already thinking about remortgaging or you have a fixed-rate product that’s coming to an end in the next 6-12 months, here are some key things to know:
- Although the Bank of England base rate has not yet fallen from its current 5.25%, it is predicted to do so from the middle of this year (Capital Economics) and many lenders are already dropping their mortgage interest rates in anticipation.
- As part of a package of support for borrowers announced by the Government last summer, you can now lock in a new fixed-rate deal up to 6 months in advance of your current deal expiring. And it’s worth starting to shop around well ahead of time, because you are not obliged to take that deal when the time comes, so can keep looking in case a better one comes up.
- Lenders typically review their rates quarterly – another reason to start making enquiries at least 6 months before your current deal is due to expire.
You might also be interested in our article, ‘When's the best time to remortgage?’
Where do I start?
Your first port of call should be an experienced mortgage broker such as ourselves, who can look at products from a wide range of lenders – including your current provider – and provide personalised advice. They can help you assess the market, consider your goals, and guide you on the best time to remortgage based on your circumstances.
To help them find the most appropriate new deal, you’ll need to have the following information about your current mortgage:
- Lender - and ideally mortgage roll number
- Level of borrowing and the term remaining
- Interest rate and deal expiry date
- Early redemption fees
You will also need to provide them with details of your salary and any additional income, as well as all other financial commitments and regular expenditure. And once you’ve found a deal, a remortgage application requires all the same documents as for the original purchase – including proof of ID and information on the property - so it’s worth starting to gather all this information together now.
