Remortgage
- We help our clients navigate the landscape of mortgages, pensions, protection and investment planning
- At Rockstone we’re in it for the long haul, so think of us as your partners in financial planning.
- We take time to listen and assess, before hand-picking the most suitable mortgage product or future investment plan to suit your needs
Get in touch for a no-obligation chat about how we might be able to help you.
What's On This Page
REMORTGAGE
What is a remortgage, and how does the process of remortgaging work in the UK?
A remortgage is moving your mortgage from your existing lender to a new lender. You’re not actually moving house, you’re just changing the mortgage from one to another.
Basically, it’s reviewing what you’ve got to see whether you want everything the same and go for a like-for-like remortgage, or make changes. You could shorten or lengthen the term or take some additional money out of your property.
We will have a chat with you to see what you want and then decide whether to go with a different mortgage lender or stay with your current one. It really depends on what you tell me.
How long does it take to remortgage?
My side of things doesn’t actually take that long, but for the whole process I would suggest you allow six to eight weeks. It should be done within that timescale.
The mortgage side of things is quick, but solicitors are involved if we’re moving to a new lender, and that can take a little bit longer – especially if you’re using free solicitors provided by the lender.
Sometimes you can use your own solicitors, who you can contact directly to speed things along.
How often can I remortgage my property?
You don’t necessarily need to do it very often. It purely depends when the mortgage comes to an end. If you initially had a two year fixed mortgage, for example, you’d remortgage at the end of that period.
You can do that six months ahead of schedule, because most mortgage offers are valid for six months, but that does depend on the lender. If you remortgage before your deal ends, you would incur earlier payment charges, especially if you were fixed in.
Can I switch lenders when remortgaging?
Yes. Switching to a new lender might be more beneficial, especially if they have a better rate. That’s the whole process of us looking through everything and having a chat with you.
It could be that we stay with your current lender and do a product transfer, or we might move to a completely different lender.
What are the main reasons why people choose to remortgage?
Mostly for a better rate. Everybody wants to save money. But perhaps you want to raise money to pay off some debts or you want to do home improvements.
It could be an option to look at how much money we can take out of the property – especially if house prices have gone up. Or, it may be that you want to reduce the term. You’re happy with the mortgage repayments you’re making and you want to pay the mortgage off sooner.
At the moment, rates are slightly higher, so some people find it a bit of a shock when they come to remortgage – so there is also the option to extend the term, which could be helpful [podcast recorded in August 2024].
What happens to my existing mortgage when I remortgage? What happens if I don’t remortgage after my deal expires?
If you remortgage to a different lender, everything happens simultaneously. You’d have a chat with your solicitor and choose the date you want it to switch over, ideally the day after your current mortgage expires. You’ll leave one lender and switch to the new lender.
If you didn’t do anything, I expect you would have a shock on your next mortgage payment, because you would go on to the lender’s standard variable rate. That could be anything from 6.99% to 9.5% or more, depending on the lender. You wouldn’t want to be on the standard variable rate for very long – so it’s always recommended to get in touch with your broker.
What factors should I consider when deciding whether to remortgage?
It’s mainly cost, timescales, and whether you want to be hassled with paperwork.
Some people I speak to will recognise that there’s a better deal with a new lender, but if it’s only saving them £500 they might not think it’s worth the time and hassle to do the extra paperwork.
However, sometimes it makes more financial sense. If you’re saving £2,500 over the length of your new mortgage it could be better to move to a new lender.
We will run through all that and see what you are happy with, whether it’s staying with your existing lender and having a hassle free product transfer, or whether to remortgage to a new lender and do all the solicitors’ paperwork.
Can I remortgage if I have bad credit? Can I remortgage to consolidate my debts?
It depends on how bad the credit situation is. I would highly recommend you first have a look at your credit score. With some lenders, if the credit issue was historical, they may be happy with the situation.
If you do have some debt, it may be that we can take out some extra money to pay that off. It may benefit you and your monthly payments by remortgaging with debt consolidation. That is something to consider.
Some lenders only allow a certain amount, so let me have a look for you, depending on how much debt there is in the background.
Speak To an Expert
Will I have to pay any fees or penalties when remortgaging?
It depends when you’re remortgaging. If you’re halfway through a fixed term, then yes, there could be earlier repayment charges, and possible exit fees.
But if you remortgage on the due date, there should not be any sort of early repayment charges there, just exit fees. If we’re remortgaging to a new lender, then Rockstone does charge a fee of £395. You’ll also have solicitors fees as well, possibly, depending on what the mortgage product entails.
Some products will include a free valuation and possibly free legals which can help keep the cost down.
How much could I potentially save by remortgaging?
It depends on the size of your mortgage, but there could be substantial savings in remortgaging and having a look at the length of term.
If you had a 30 year mortgage to begin with, and you’ve had that for five years already, you might like to reduce it down from 25 to 20 years. That could make a considerable difference in how much interest you’d pay over that time and give you a substantial saving.
If you are remortgaging to a better rate, you will enjoy a slightly cheaper mortgage repayment each month. So it’s a case of having a look at everything in detail – and yes, it could save you a lot of money.
What documentation will I need to provide when remortgaging?
If you’re staying with your existing lender, then there won’t be too much, possibly just ID for the mortgage advisor. If you’re moving to a new lender, there would be the usual documents, such as wage slips, bank statements and ID.
Will I need a new valuation or survey when remortgaging?
Yes, most lenders will use their own valuers. If you remortgage to a different lender, you will probably have a new valuation. It could be a physical valuation where they come and look at the property, or as simple as a desktop or a drive-by. Some are quite quick and easy. Most lenders do include a free basic valuation within their remortgage products, as well.
Is it harder to remortgage if I’m self-employed or a contractor?
It can be, slightly. It depends. If you were self-employed or a contractor to begin with, there won’t be major issues, because we could stay with the existing lender for a product transfer.
If your income had come down over the years that you’ve had your mortgage, or if you recently became self-employed or a contractor, that could make life more difficult because you do need a track history of at least a year. Ideally you’ll have two years of self-employment paperwork. For a contractor, again lenders like to see at least 12 months’ or 24 months’ history.
What happens if my property value has decreased since I initially obtained my mortgage?
The key thing is to let us know how much you realistically think the property is valued at. Often with a remortgage the current lender will have an idea, which is a guideline we can work with.
If you’ve had work done on the property, you might not agree with the value and want the lender to go out and assess the property again – which is possible.
If you bought the property at 60% Loan to Value, so you had a 40% deposit, and the value has gone down, you’re possibly now in a 75% Loan to Value bracket. There’s not going to be too much a difference there.
It’s when you put down a smaller deposit in the beginning, at perhaps 95%, that you’ll possibly get into negative equity. That can be a little bit more difficult.
However, once you’ve got a mortgage, the great thing is we can simply stay with your mortgage lender and do a product transfer. There is never a major issue there.
What are the advantages and disadvantages of fixed rate versus variable rate remortgages?
Both are good, depending on your scenario. A fixed rate is most popular – you have the certainty of knowing what your monthly mortgage rates will be and that could be a two year, three year, five year or 10 year fix, so you would know for that time period. However, you will be tied in for that time period, there’s no flexibility and if you wanted to leave within that time period, then you will incur earlier repayment charges.
With a remortgage you could do nothing and simply go on to the lenders standard variable rate, which is a lot higher but that could give you short term flexibility to make some changes in the short term if you wanted to make a large overpayment for example, or you didn’t know if you were going to be moving in the Imminent future. It might just give you a little bit of flexibility there.
The other option is to go for a tracker rate mortgage, which is currently based on the Bank of England base rate plus whatever the lender adds on. This will go up or down depending on the Bank of England base rate. So you could benefit if rates happen to come down, but it is a gamble because obviously rates could go up. However, if you want flexibility, this is probably more beneficial.
What we would do is discuss your future plans and if you’re looking to move in the short term in the next year or 18 months for example, something like a tracker rate could be more beneficial with not having the earlier repayment charges and give you that flexibility. So, everything is done on an individual basis.
Can I remortgage if I’m nearing retirement age?
Yes. It depends on when you plan to retire. Some lenders will just assume you’re going to retire at state pension age, while with others, you have to retire by 70 or 75.
Some haven’t actually got an age limit, which is great. As long as you’re not a coal miner or a scaffolder, you could be doing that job past 70 or 75. But fewer lenders offer that. That’s something we would look at to see whether it’s going to be realistic and affordable for you.
How can a mortgage broker help with a remortgage?
We love to save people money, and remortgaging can be a big benefit there. Again, it could be an easy way to raise some money to do home improvements, go on that fantastic holiday or pay off some debts, if you have the equity available.
We will have a look at exactly what your needs are, hopefully give you the right outcome, and make it as easy and hassle free as possible for you.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.
