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 - switching your mortgage to a new deal - can save UK homeowners thousands of pounds per year. With mortgage rates fluctuating significantly, understanding when and how to remortgage has never been more important. This comprehensive guide covers everything you need to know about remortgaging in 2025, including when to switch, the process, costs, and how to find the best rates.
What is Remortgaging?
Remortgaging means replacing your current mortgage with a new one, either with your existing lender (a product transfer) or a different lender. The main reasons to remortgage are to get a better interest rate, release equity, or change your mortgage type or term. Most homeowners remortgage when their initial fixed or tracker rate ends and they would otherwise move to an expensive Standard Variable Rate (SVR).
The Cost of Not Remortgaging (SVR Trap)
When your initial mortgage deal ends, you're automatically moved to your lender's SVR, which is typically 2-3% higher than the best available rates. The table below shows how much this costs for different mortgage balances.
| Mortgage Balance | Best Fixed Rate (4.5%) | Typical SVR (7.5%) | Monthly Difference | Annual Cost of SVR |
|---|---|---|---|---|
| £100,000 | £556 | £699 | £143 | £1,716 |
| £150,000 | £833 | £1,049 | £216 | £2,592 |
| £200,000 | £1,111 | £1,398 | £287 | £3,444 |
| £250,000 | £1,389 | £1,748 | £359 | £4,308 |
| £300,000 | £1,667 | £2,098 | £431 | £5,172 |
| £350,000 | £1,944 | £2,447 | £503 | £6,036 |
Don't Stay on SVR
When to Remortgage
Best Times to Remortgage
- 6 months before your deal ends - Most mortgage offers are valid for 6 months, so you can secure a rate early with no risk
- When your property value has increased - Higher value means lower LTV and better rates
- When your credit score has improved - Better credit = better rates
- If you want to borrow more - Remortgaging can release equity for home improvements
- To switch mortgage type - e.g., from interest-only to repayment
When NOT to Remortgage
- If Early Repayment Charges (ERCs) are too high - Calculate if savings outweigh penalties
- If your circumstances have worsened - You may not pass affordability checks
- If your property value has dropped significantly - Higher LTV means worse rates
- If you're planning to move soon - Setup costs may not be worth it
Product Transfer vs Full Remortgage
| Factor | Product Transfer | Full Remortgage |
|---|---|---|
| What is it? | New deal with same lender | Switch to different lender |
| Valuation needed? | Usually not | Yes |
| Legal work needed? | No | Yes (but often free) |
| Time to complete | Days | 4-8 weeks |
| Range of products | Limited to one lender | Whole market |
| Best rates? | Sometimes competitive | Usually better choice |
| Credit check? | Soft or none | Full check required |
Compare Both Options
The Remortgage Process Step-by-Step
Step 1: Review Your Current Mortgage (6 Months Before End)
- Check when your current deal ends
- Note any Early Repayment Charges
- Find your current balance and remaining term
- Estimate your property value (Zoopla, Rightmove)
Step 2: Calculate Your Loan-to-Value (LTV)
LTV = (Mortgage Balance ÷ Property Value) × 100. For example, £180,000 mortgage on £300,000 property = 60% LTV. Lower LTV means better rates, with key thresholds at 90%, 85%, 80%, 75%, and 60% LTV.
Step 3: Check Your Credit Report
Review your credit report with all three agencies (Experian, Equifax, TransUnion) using free services. Dispute any errors and avoid new credit applications before your mortgage application.
Step 4: Compare Deals
- Use comparison sites for an overview
- Consider a mortgage broker for whole-market advice
- Check your existing lender's product transfer rates
- Compare total cost (rate + fees) not just the headline rate
Step 5: Apply
Submit your application with required documents: ID, proof of address, payslips (3 months), bank statements (3 months), P60 or tax returns if self-employed, current mortgage statement.
Step 6: Valuation and Legal Work
The new lender will value your property (often free) and solicitors will handle the legal transfer. Many remortgage deals include free legal work and valuation.
Step 7: Completion
Your new lender pays off your old mortgage and your new deal begins. Ensure completion happens before your current deal ends to avoid SVR.
Remortgage Costs to Consider
| Cost | Typical Amount | Notes |
|---|---|---|
| Arrangement Fee | £0-£2,000 | Can add to mortgage but pay interest on it |
| Valuation Fee | £0-£500 | Often free with remortgage deals |
| Legal Fees | £0-£500 | Often free with remortgage deals |
| Early Repayment Charge | 1-5% of balance | Check current mortgage terms |
| Exit Fee | £50-£300 | Charged by old lender |
| Broker Fee | £0-£500 | Many brokers are fee-free |
Remortgaging to Release Equity
Remortgaging can let you borrow more against your home's increased value. Common uses include home improvements, debt consolidation, or helping children with deposits. However, consider carefully:
Equity Release Caution
- Debt consolidation - You're turning short-term debt into 25+ year debt with interest
- Affordability - Higher borrowing means higher monthly payments
- Property at risk - Your home secures the debt
- Total interest - Calculate the real cost over the mortgage term
Fixed vs Variable Rate When Remortgaging
| Rate Type | Best When | Risk Level |
|---|---|---|
| 2-Year Fixed | Rates expected to fall | Low risk, more flexibility |
| 5-Year Fixed | Want payment stability | Low risk, less flexibility |
| 10-Year Fixed | Long-term certainty | Lowest risk, least flexibility |
| Tracker | Rates expected to fall | Higher risk, follows base rate |
| Variable/Discount | Short-term flexibility | Highest risk, rate can change |
2025 Remortgage Tips
- Start early - Begin 6 months before your deal ends to secure rates without commitment
- Consider the true cost - A lower rate with a £2,000 fee may cost more than a slightly higher fee-free rate
- Use a broker - Especially valuable if you're self-employed or have complex circumstances
- Don't just go with your bank - Loyalty rarely pays with mortgages
- Overpay if possible - Getting below an LTV threshold before remortgaging can unlock better rates
The Bottom Line
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.