When Should You Remortgage in the UK?
Remortgaging means switching your mortgage to a new deal, either with your current lender or a different one. Most people remortgage when their fixed-rate or discounted deal ends to avoid moving onto their lender's standard variable rate (SVR), which is typically much more expensive. Even saving 1% on your interest rate can mean hundreds of pounds less each month and tens of thousands saved over your mortgage term.
How Much Does Remortgaging Cost?
Remortgaging isn't free, but costs have come down significantly in recent years. Many lenders now offer fee-free products or include free valuations and legal work. Typical costs include an arrangement or product fee (£0-£1,999, which you can often add to your mortgage), a valuation fee (often free, or £0-£500), legal fees (usually free or £0-£500 with free remortgage solicitors), and potentially early repayment charges if you're still in a fixed or discounted period (typically 1-5% of your outstanding balance). Always factor in these costs when comparing deals.
Fixed vs Tracker: Which Remortgage Type is Best?
Fixed-rate mortgages lock in your interest rate for a set period (typically 2, 3, 5, or 10 years), giving you certainty over your monthly payments. They're popular when interest rates are low or expected to rise. Tracker mortgages follow the Bank of England base rate plus a set percentage, so your rate goes up and down with the base rate. They're riskier but can be cheaper if rates fall. Variable-rate mortgages can change at your lender's discretion and are generally best avoided. Most people opt for 2 or 5-year fixed rates for stability.
Will You Pass Affordability Checks for a Remortgage?
Even if you're remortgaging with your existing lender, you'll need to pass affordability checks. Lenders assess your income, outgoings, and financial commitments to ensure you can afford the new mortgage. If your income has dropped, you have new debts, or you want to borrow more, you might find it harder than your original mortgage application. The good news is that if you're staying with the same lender for the same amount (a product transfer), checks are usually much simpler. If you're struggling to pass affordability with one lender, try others - criteria vary significantly between lenders.
When is the Best Time to Start Your Remortgage?
Start looking 3-6 months before your current deal ends. Most lenders let you apply up to 6 months in advance and will honor the rate you're quoted (even if rates rise in the meantime). This gives you time to compare deals, gather documents, and complete the process before you fall onto your lender's SVR. Missing this window could cost you hundreds of pounds a month. Set a reminder on your phone for 6 months before your deal ends - it's one of the most valuable financial planning habits you can build.