Key Remortgage Terms Explained
When you compare remortgage options, the hardest part is often not the rate itself — it is understanding the language around switching, borrowing more, legal work, property checks, and how your current deal behaves.
Important Information
This content is for educational purposes only and does not constitute financial advice. CHFinance is authorised and regulated by the Financial Conduct Authority. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Knowledge Base
Demystifying mortgage terminology
1) Product Transfer
What it means
A product transfer is when you switch to a new mortgage deal with your current lender instead of moving to a new lender. Some lenders also call this a rate switch. Existing-customer switch pages often explain that legal and valuation fees may be lower or absent compared with a full remortgage, although product fees can still apply.
Example
🧮 Quick calculator?
Estimate your product transfer savings:
✍️ Mini exercise
Your current payment is £1,180 a month. A product transfer would reduce it to £1,095. How much lower is the payment each month?
2) Further Advance / Additional Borrowing
What it means
Additional borrowing, sometimes called a further advance, is when your current lender lets you borrow more on top of your existing mortgage. Lenders usually tie this to an agreed purpose, and the new borrowing remains secured on your home. Some lenders say the extra borrowing may be on a separate rate, while others collect it as part of the same monthly mortgage payment.
Example
🧮 Quick calculator?
Estimate your new overall borrowing:
✍️ Mini exercise
Current balance: £142,000 Further advance requested: £18,000 What would the total secured borrowing be?
3) Redemption Statement
What it means
A redemption statement is a document from your lender showing exactly how much is needed to repay your mortgage in full on a chosen date. It usually includes the remaining balance, interest due to that date, the daily interest rate, and any Early Repayment Charges if they apply.
Example
🧮 Quick calculator?
Estimate your updated payoff figure:
✍️ Mini exercise
Redemption figure: £198,000 Daily interest: £22 Completion happens 3 days later What is the updated amount approximately?
4) Mortgage Term
What it means
Your mortgage term is the amount of time you have to repay the loan and interest. MoneyHelper says mortgage terms can range from 2 to 40 years, and notes that a typical term is often around 25 years. A longer term usually lowers monthly payments but can increase total interest paid over time.
Example
🧮 Quick calculator?
Convert mortgage term years to months:
✍️ Mini exercise
How many months are in a 30-year mortgage term?
5) Fixed Rate
What it means
A fixed-rate mortgage keeps the interest rate the same for a set period. MoneyHelper says this can give borrowers certainty because they know what they will pay each month during that fixed period. Lenders commonly offer fixed periods such as 2 or 5 years, though longer fixes also exist.
Example
🧮 Quick calculator?
Budget certainty check:
✍️ Mini exercise
A borrower wants more certainty over monthly payments for the next 60 months. Which fixed period matches that goal best?
6) Tracker Rate
What it means
A tracker mortgage follows another rate, usually the Bank of England Bank Rate, plus a set lender margin. MoneyHelper explains that if the rate it tracks goes up or down, the mortgage rate usually moves by the same amount. Tracker deals often last 2 to 5 years, although some last longer.
Example
🧮 Quick calculator?
Calculate your payable tracker rate:
✍️ Mini exercise
Your mortgage tracks at Bank Rate + 0.95%. Bank Rate is 3.75%. What is your mortgage rate?
7) Conveyancing
What it means
Conveyancing is the legal work involved in property transactions. In the UK, this can be handled by either a solicitor or a licensed conveyancer. On a remortgage, legal work is often needed when you are changing lender, even though you are not buying a new property. MoneyHelper explains that solicitors and conveyancers handle the legal side of property matters, and its costs guide includes legal and conveyancing fees as part of home-related transactions.
Example
🧮 Quick calculator?
Process Check — Ask yourself:
✍️ Mini exercise
Which scenario is more likely to need remortgage legal work: A) switching to a new deal with the same lender B) changing to a different lender
8) Valuation
What it means
A mortgage valuation is the lender’s check on the property’s current value. MoneyHelper notes that lenders may arrange a valuation survey during the mortgage process to confirm the property is suitable security and that the result can affect the final offer or loan amount.
Example
🧮 Quick calculator?
Calculate your Loan-to-Value (LTV) below:
✍️ Mini exercise
A lender values your property at £280,000 and your new mortgage would be £224,000. What is the LTV?
9) Porting
What it means
Porting means moving your current mortgage rate or product to a new property when you move home. Lenders make clear that even if a rate is portable, you are still applying for a new mortgage on the new property, and additional borrowing may be needed if the new home costs more.
Example
🧮 Quick calculator?
Estimate porting extra borrowing:
✍️ Mini exercise
New property price: £410,000 Equity available: £150,000 Ported balance: £170,000 How much extra borrowing is needed?
10) Unencumbered
What it means
An unencumbered property is one you own outright, with no mortgage or loan secured against it. NatWest explains that borrowing on an unencumbered property is different from a standard remortgage because it is effectively a new mortgage secured against a home that is currently mortgage-free.
Example
🧮 Quick calculator?
Simple self-check: Is your outstanding mortgage balance exactly £0?
✍️ Mini exercise
A homeowner owes £0 on their home and has no secured loans against it. Is the property unencumbered?
A practical way to use these terms
When reviewing remortgage options, a sensible order is:
- ✓ Check whether a product transfer is available
- ✓ Ask whether additional borrowing is possible if you need more funds
- ✓ Get a redemption statement if you may switch lender
- ✓ Review whether your term still suits your budget
- ✓ Compare fixed versus tracker risk
- ✓ Budget for conveyancing and check whether a valuation is required
- ✓ If moving home, ask whether your rate is portable
- ✓ If your home is mortgage-free, ask whether you are dealing with an unencumbered property instead of a standard remortgage path
Final Takeaway
- ✅Product transfer = same lender
- ✅Remortgage = often a new lender
- ✅Further advance = borrowing more with the current lender
- ✅Porting = moving your current rate to a new home
- ✅Unencumbered = no current mortgage on the property