If you’ve had a mortgage for more than a couple of years, you’ve probably felt that nagging question playing at the back of your mind: could you be paying less? People often stick with their original mortgages, mostly because of habit or because the process of switching seems as fun as assembling furniture blindfolded. But it’s pretty wild that, according to UK Finance, over 1.4 million people remortgaged their homes in 2023, and many slashed their monthly bills. So what’s the actual advantage? And is it really worth your time?
Understanding Remortgaging: What Does It Really Mean?
Let’s strip the jargon: remortgaging just means switching your current mortgage to a new deal, usually with a new lender, but sometimes you can stick with your existing one. Most people consider it when their fixed, tracker, or discounted period ends and the lender’s default rate (usually called the SVR or standard variable rate) kicks in—which tends to be higher. Imagine suddenly handing over an extra £150 a month just because a deal ended. Sounds painful, right? That’s why so many Brits swap out their old mortgage for a shinier, more affordable one.
Remortgaging isn’t only about chasing a lower interest rate—though that’s easily the headline benefit. Sometimes people remortgage to borrow more money (like funding that long-overdue kitchen update) or to change the mortgage length. For example, shortening your term knocks off years of interest payments, while extending it can reduce monthly outgoings if life’s thrown you a curveball.
If you’re thinking only first-time buyers remortgage, think again. In the past year, close to half of all UK home loans approved were actually remortgages, not purchases, according to the Financial Conduct Authority’s latest data. Unsurprisingly, remortgaging peaks every five years, lining up with when fixed-rate deals wind down. Max, my dog, is pretty chill, but even he’d get twitchy watching money wasted on a lousy rate.
One simple myth-buster: you’re not locked in for life when you choose your mortgage. Banks bank on you not paying attention, but a simple switch could put serious cash back in your pocket. In fact, the Money Advice Service found that those who switch can save an average of £1,000 a year. Doesn’t sound so boring now, does it?
The Key Advantages of Remortgaging
So, why would someone go through the hassle of remortgaging? The main headline is saving money. The rates you started with probably looked great years ago, but the market isn’t static. Let’s face it: lenders want your business and will offer some juicy deals if you shop around. Locking into a new, lower rate right as your old deal ends could mean tangible savings month after month.
Besides lower rates, you can use remortgaging to clear expensive debts. Imagine having a few credit cards or loans charging double-digit interest. If your lender allows you to borrow extra when you remortgage, consolidating those debts could be way cheaper. But only do this if you’re truly disciplined, because stretching a short-term debt over 20 years increases the amount of interest you pay unless you overpay regularly.
Another lesser-known but important edge: you get the chance to reset your mortgage term. If your income has jumped since you took out your first mortgage, why not shorten your loan term—finish early and wave goodbye to years of interest payments? Vice versa, if cashflow is tight, re-extending your mortgage can bring relief. Flexibility isn’t just about finances, either. Folks use remortgaging to switch from interest-only to repayment, which is vital if you want to be free of mortgage debt at retirement.
Here’s a fun stat from UK Finance: the average person moves house only every 21 years and remortgages every 4 to 5 years. So most people stay put but make sure they’re not losing out with an outdated deal. Your home is probably your most valuable asset—why pay more than you should?
And don’t overlook incentives. Lenders sometimes throw in perks: free legal work, free valuations, and sometimes even cashback if you switch to them. That’s like being handed a bonus for shopping smarter—although always check the overall deal since low rates sometimes hide high fees. A quote from Martin Lewis at MoneySavingExpert drives it home:
“Being loyal to your lender rarely pays. Remortgaging at the right time can slice thousands off your bill.”
How Does Remortgaging Work in Practice?
Remortgaging isn’t rocket science, but the process has a few moving parts. First, get your current mortgage info—remaining balance, term left, interest rate. Then, you’ll want to check whether you’re in an early repayment charge (ERC) period, which is typically the first few years of a deal. If you are, calculate if paying the fee is actually worth it compared to the savings from a better deal.
Next step: hunting for a deal. You can use comparison sites or, even better, a mortgage broker (especially if your circumstances are unusual, like being self-employed). Once you apply and get a mortgage offer, the new lender will sort the legal transferring, pay off your old mortgage, and set up the new one. The whole thing normally takes about 4 to 8 weeks—just about how long it takes Max, my dog, to forget where he buried his treats.
For anyone worried it’ll be a bureaucratic nightmare, the good news is lenders are desperate to make it easy. A lot of paperwork’s handled for you with basic info and ID checks. If you’re switching to a better deal with your existing lender (a ‘product transfer’), you often don’t need new legal work at all.
If you’re borrowing more, expect a deeper look at your finances. Lenders will want to know you can afford repayments and may want info on what you’ll use the cash for (remodelling kitchen, paying off debts, etc.). They may require a property valuation—sometimes this can be a drive-by or desktop check, which is less hassle than it sounds.
Just a heads-up: if your home’s value has jumped, your loan-to-value (LTV) ratio will be lower, unlocking even better rates. The table below shows how much your LTV impacts rates:
| LTV Ratio | Typical Interest Rate (2025) |
|---|---|
| 60% or less | 4.05% |
| 75% | 4.19% |
| 85% | 4.45% |
| 90%+ | 4.95% |
So, if you’ve paid down a good chunk of your mortgage or your property’s value has soared, your new deal could be much more appealing.
Common Pitfalls and How to Avoid Them
Remortgaging sounds like an obvious win, but there are a few bananas to avoid slipping on. The biggest is early repayment charges—sometimes these can be several thousand pounds if you leave your deal too early. Always check your paperwork. Most people find the sweet spot is switching right when their fixed or tracker deal ends.
Beware hefty arrangement fees. That headline interest rate might look dreamy at 3.89%, but if it comes with a £2,000 fee, is it really a bargain? Do the maths. Some brokers suggest dividing the fee by the number of years in the fix, then adding it to the rate to see your ‘true’ yearly cost.
Thinking about borrowing extra during remortgage? Make sure you can genuinely afford the new repayments. Lenders became stricter after the last financial crisis, so you’ll need good credit and evidence of your income. Don’t forget that stretching your mortgage term lowers your payments but increases how much interest you’ll pay in the long run.
If your current mortgage balance is low (say, under £50,000), some lenders won’t want your business. This is especially true for those with small remaining home loans. Always check their minimum loan size. Similarly, if your home’s value has dropped, remortgaging might not save you any money—especially if you now slip into a higher LTV band and lose access to the best deals.
Finally, keep your credit record tidy. New lenders will check it, so avoid missed payments or taking out new credit right before applying. Getting rejected for a remortgage is frustrating, so it’s worth checking your report in advance.
Tips to Make the Most of Your Remortgage
So, how do you get the best out of remortgaging? Rule number one: don’t sleepwalk into your lender’s standard variable rate. Put a reminder in your calendar 3-6 months before your fixed deal ends so you can shop around.
Use a broker if you’re unsure. They can access more deals—sometimes exclusive ones you won’t spot online. Don’t just check the rate, look at fees, incentives, and total cost over the term. Some lenders offer free legals and valuations, but check these don’t come at the cost of a worse rate.
If you can afford it, consider overpaying—even small amounts can shave years off your mortgage and save thousands in interest. Some lenders let you overpay by 10% a year without any penalty during the fixed term. With rates changing rapidly, some experts predict that homeowners who lock in now can avoid rate hikes forecasted for 2026. It can literally pay to be early. Here’s a quick action plan:
- Check your current deal’s end date and any early repayment charges
- Compare fee-inclusive costs, not just headline rates
- Review your loan-to-value, which may have improved if your home’s value rose
- Ensure your credit file is clean
- Plan ahead – rates can change quickly, so move early
Switching up your mortgage can feel like a hassle, but the potential payoff is more cash in your pocket each month—and possibly a big boost to your rainy-day fund or holiday savings. Remortgaging might sound like something reserved for finance geeks, but anyone can—and should—do it if it’ll save them money. That’d make even Max wag his tail.