Remortgaging explained

Remortgaging means replacing your current mortgage with a new mortgage from a different lender.

People often remortgage when their current deal is ending, but you may also choose to remortgage to reduce your monthly payments, borrow more money or change your mortgage type.

This guide explains how remortgaging works in the UK, the difference between a remortgage and a product transfer, and what you can expect from the process, including timelines and potential costs.

What is remortgaging?

When you remortgage, you replace your current mortgage with a new one from a different lender.

The process is similar to applying for a mortgage initially, although it’s typically much quicker because you're staying in the same property.

How is it different from a product transfer?

A product transfer is when you switch to a new mortgage deal with your current lender, rather than moving to a new lender.

The process is usually simpler and quicker than remortgaging. You may not need a full mortgage application, property valuation or legal work, although this will depend on your lender and any changes you're making to your mortgage.

If you’re an existing TSB mortgage customer switching to a new deal online is quick and easy.

Why remortgage?

People often consider remortgaging when their current mortgage deal ends to save money. Here are some other reasons to remortgage your property:

1. Save money on your monthly payments

If interest rates have changed since you took out your mortgage, remortgaging could help reduce your existing monthly payments.

2. Pay off your mortgage early

If your circumstances have changed, for example your income has risen or you inherit money, you may want to pay more towards your mortgage or pay off a lump sum to reduce your mortgage term.

3. Lower your payments by extending your term

You may be able to extend your mortgage term to reduce the amount you pay each month.

You'll usually pay more interest overall if you extend your term, so consider whether it's right for you.

4. Change your mortgage type

Remortgaging could let you switch to a mortgage that better suits your needs. For example, you may choose a fixed rate for more certainty over your monthly payments.

You may also be able to switch between an interest-only and repayment mortgage if your circumstances have changed.

5. Access more mortgage deals if your home has increased in value

If your home has gone up in value, your loan-to-value (LTV) could be lower than when you took out your mortgage.

A lower LTV may give you access to a wider range of mortgage deals and potentially lower interest rates when you remortgage.

6. Borrow more against your home

You may be able to borrow more against your home to fund large expenses such as home improvements or buying a car.

Borrowing more will increase the amount you owe, so consider the additional cost and whether you can afford the repayments.

When can you remortgage your house?

Many people start looking for a new mortgage deal around three to six months before their current deal ends. Starting the remortgaging process early gives you time to compare mortgages and understand any fees that may apply.

You can remortgage before your current deal ends, but you may need to pay an Early Repayment Charge (ERC). The amount you'll pay depends on your lender and mortgage terms.

How long does remortgaging take?

Remortgaging your property typically takes between four and eight weeks, although this can vary depending on your circumstances.

The process may take longer if additional checks, legal work or property valuations are needed. Starting the process before your current mortgage deal ends can help avoid delays.

Remortgaging costs

The cost of remortgaging can add up so you need to ensure you're aware of the charges and fees involved. There are usually added costs for leaving a mortgage early and when taking out a new one.

Fees paid to your current lender

Early repayment charge

You may pay an Early Repayment Charge (ERC) if you leave your current mortgage deal before it ends. The charge normally applies during the introductory deal period when you're on a fixed, discount or tracker rate. It's usually around 1 - 5% of the mortgage loan. Check your current mortgage documentation to understand what fees you may have to pay.

Exit/redemption fee

Some lenders may also charge an exit fee when you remortgage.

Fees paid to your new lender

Booking fee

This is an upfront fee charged by some lenders to reserve a mortgage deal.

If the mortgage does not complete there may be instances where this is not refunded. Please check with your mortgage provider.

Product fee

A fee is paid (where applicable) when the mortgage is completed. Depending on the lender, this may be paid upfront or added to your mortgage.

Valuation fee

You may need to pay a valuation fee so the lender can confirm how much your property is worth and whether it provides suitable security for the mortgage.

The fee can vary depending on the lender and the value of the property. In some cases, it may range from around £150 to £1,500, although some lenders offer free valuations.

Legal fee

You may pay a fee for the legal work needed to remortgage your property.

Remortgage products

When you remortgage, there are different types of mortgage deals to consider. The right option will depend on your circumstances and what you're looking for from your mortgage.

• Fixed rate mortgages: Your interest rate stays the same for a set period. This can give you more certainty over your monthly budget.
• Tracker mortgages: Your interest rate usually follows the Bank of England Base Rate. This means your monthly payments can go up or down.

At TSB, we offer both fixed rate and tracker rate remortgages.

Repayment methods

As well as choosing a mortgage deal, you'll also need to consider how you repay your mortgage.

With a repayment mortgage, your monthly payments go towards both the amount you've borrowed and the interest.

With an interest-only mortgage, your monthly payments only cover the interest. You'll need a separate plan to repay the amount you borrowed at the end of the mortgage term.

How much can I borrow?

The amount you can borrow will depend on your annual income and personal circumstances. It will be based on what the mortgage lender thinks is a sensible amount to lend to you and what you think you can afford.

You can use the TSB mortgage calculator to get an idea of the amount TSB could lend you.

Credit history

When you remortgage with a new lender, they'll usually check your credit history alongside your income, outgoings and other financial circumstances.

The lender will request information from credit reference agencies. You can also check your credit file with Experian, Equifax or TransUnion. Learn more about the process in our guide to credit and credit scores.

In general, a stronger credit history may help you access a wider range of mortgage deals.

Can you remortgage with bad credit?

It may still be possible to remortgage if you have a poor credit history, although the deals available to you may be more limited. Lenders will look at your overall financial circumstances before making a decision.

What happens when you remortgage?

If you're wondering how to remortgage, the process is often simpler than applying for your first mortgage because you're staying in the same property. You'll compare mortgage deals, apply for a new mortgage and complete any legal work before your new mortgage replaces your existing one.

Once you're ready to apply, the process will usually look something like this:

1. Complete your application
An application will need to be completed in person, online, via telephone, or by post. Lenders must assess your suitability for a remortgage by asking for details of your outgoings, income and age.

2. Provide supporting documents
Lenders will usually ask you to provide the following paperwork:

• proof of identity, your passport and National Insurance number
• proof of address for the last three years (make sure you're on the electoral role at your current address)
• payslips for the last 3 months
• bank statements for the last 3 months
• details of any loans you currently have outstanding, including student loans
• mortgage statements for the last year, if you're moving lenders

You'll also receive a Mortgage Illustration, which explains the key features, costs and terms of the mortgage. 

3. Property valuation and legal work

The lender may arrange a valuation of your property. A conveyancer or solicitor will then complete the legal work needed to transfer the mortgage.

4. Completion

Once the checks and legal work are complete, your new mortgage will replace your existing one. You'll then begin making payments under your new mortgage deal.

Ready to explore your options?

If you're thinking about moving your mortgage to TSB, we can help make the switch simpler. Depending on your mortgage, benefits can include:

• Free standard legal work when borrowing up to £999,999.
• No valuation fee for mortgages up to £1 million.

Find out more and see available deals on our Remortgages page.

Already have a mortgage with TSB? If you want to switch to a new deal with us, this is a product transfer rather than a remortgage. Visit our mortgages for existing customers page to explore your options.

If you'd like more practical guidance before applying, read our Remortgaging Tips guide. It covers what to consider before remortgaging, how to compare deals and ways to find a mortgage that's right for you.