Remortgage UK: When and How to Switch (2025)
Complete guide to remortgaging in the UK. Learn when to switch, how to get the best rates, and avoid costly mistakes. Save thousands on your mortgage.
Remortgaging can save you thousands of pounds per year by securing a better interest rate. This comprehensive guide covers when to remortgage, how to get the best deals, and common mistakes to avoid in 2025.
When Should You Remortgage?
Best Time to Start:
Begin looking for remortgage deals 6 months before your current fixed-rate period ends. This gives you time to compare offers and lock in rates before moving to your lender's expensive standard variable rate (SVR).
Key Remortgage Triggers:
- Fixed rate ending: Avoid moving to SVR (typically 7-8%)
- Better rates available: Rates have dropped since your last deal
- Increased equity: Your home value has risen, improving LTV
- Changed circumstances: Income increased or credit improved
- Release equity: Need funds for home improvements or debt consolidation
How Much Can You Save?
Example Savings (£200,000 mortgage, 25 years remaining):
| Rate | Monthly Payment | Annual Cost |
|---|---|---|
| SVR at 7.5% | £1,479 | £17,748 |
| 5-year fix at 4.5% | £1,111 | £13,332 |
| Potential Saving | £368/month | £4,416/year |
The Remortgage Process
Step 1: Check Your Current Deal
Review your mortgage statement to find:
- Current interest rate and type (fixed, variable, tracker)
- When your fixed rate ends
- Outstanding balance
- Early repayment charges (ERCs)
Step 2: Calculate Your Loan-to-Value (LTV)
LTV = (Outstanding Mortgage ÷ Property Value) × 100
Lower LTV ratios unlock better rates. For example, 60% LTV typically offers rates 0.5-1% lower than 90% LTV.
Step 3: Compare Deals
Use comparison sites and mortgage brokers to find the best rates. Consider:
- Interest rate: Fixed vs variable, 2-year vs 5-year
- Fees: Arrangement, valuation, legal, exit fees
- Flexibility: Overpayment allowances, payment holidays
- Portability: Can you take it to a new property?
Step 4: Apply and Complete
The remortgage process typically takes 4-8 weeks:
- Week 1-2: Application and credit checks
- Week 2-4: Property valuation
- Week 4-6: Legal work and searches
- Week 6-8: Final approval and completion
Remortgage Costs
Typical Remortgage Costs:
- Arrangement fee: £0-£2,000 (can be added to mortgage)
- Valuation: £200-£500 (often free with lender)
- Legal fees: £500-£1,000 (often free with lender)
- Exit fee: £50-£300 (from current lender)
- Early repayment charge: 1-5% of balance (if applicable)
Total typical cost: £1,000-£2,500
Common Remortgage Mistakes
Avoid These Errors:
- ✗ Waiting until your fixed rate ends (start 6 months early)
- ✗ Only checking your current lender (shop around)
- ✗ Ignoring fees (a low rate with high fees may cost more)
- ✗ Choosing the wrong term (2-year vs 5-year depends on your plans)
- ✗ Not using a broker (they access exclusive deals)
Remortgaging with Bad Credit
It's still possible to remortgage with poor credit, but expect:
- Higher interest rates (typically 1-3% more)
- Larger deposit requirements (lower LTV)
- Fewer lender options
- Specialist broker recommended
Key Takeaways
- ✓ Start looking 6 months before your fixed rate ends
- ✓ Remortgaging can save £3,000-£5,000+ per year
- ✓ Lower LTV ratios unlock better rates
- ✓ Consider both rate and fees when comparing deals
- ✓ Use a mortgage broker to access exclusive offers
Frequently Asked Questions
When is the best time to start looking for a remortgage?
Start looking 6 months before your current deal ends. This gives you time to compare deals, lock in rates, and complete the process before moving onto your lender's expensive standard variable rate (SVR).
How much does it cost to remortgage?
Typical costs include arrangement fees (£0-£2,000), valuation (£200-£500), legal fees (£500-£1,000), and exit fees (£50-£300). Total costs usually range from £1,000-£2,500, though many lenders offer free valuations and legal work.
Can I remortgage with bad credit?
Yes, though your options will be more limited and rates higher. Specialist lenders work with borrowers who have CCJs, defaults, or missed payments. Consider a product transfer with your current lender as they may be more lenient.
Should I do a product transfer or remortgage to a new lender?
Product transfers are quicker and cheaper but may not offer the best rate. Remortgaging to a new lender gives you access to the whole market and potentially better rates, but involves more costs and time. Compare both options.
What happens if I don't remortgage when my deal ends?
You'll automatically move onto your lender's standard variable rate (SVR), typically 7-8% compared to competitive fixed rates of 4-5%. This could cost you thousands of pounds extra per year.