What is a remortgage?
A remortgage is when you replace the mortgage on a property you already own with a new mortgage, usually without moving home.
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
Understanding how remortgages work
1) What is a remortgage?
What it means
A remortgage is when you replace the mortgage on a property you already own with a new mortgage, usually without moving home. In stricter UK consumer guidance, that normally means moving to a new lender; if you stay with your current lender and switch to one of its new deals, that is usually called a product transfer or rate switch.
Example or Key Point
🧮 Quick calculator?
Compare your current deal against a potential Standard Variable Rate (SVR):
✍️ Mini exercise
Why do most people remortgage?
2) How a remortgage works
What it means
In simple terms, your new lender agrees a new mortgage, that new mortgage pays off the old one, and you then make your monthly payments under the new deal and terms. The process usually involves an application, affordability checks, credit checks, and often a valuation of the property. If you are moving to a new lender, there is usually legal work as well.
Example or Key Point
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Estimate your updated payoff figure:
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Do you have to move house to remortgage?
3) Remortgage vs product transfer
What it means
A remortgage usually means changing lender. A product transfer means staying with your current lender and switching to a new rate from them. Product transfers are often quicker and simpler, but they do not give you the same whole-of-market comparison as moving to a different lender.
Example or Key Point
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Estimate your product transfer savings:
✍️ Mini exercise
Is switching to a new rate with your current lender called a remortgage?
4) Why people remortgage
What it means
The most common reason is to save money or avoid rolling onto a more expensive rate when a deal expires. But remortgaging can also be used to bring borrowing onto a new structure, change from one type of rate to another, or release extra funds for an accepted purpose such as home improvements.
Example or Key Point
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Calculate your Loan-to-Value (LTV) below:
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Can reaching a lower LTV band get you a better deal?
5) What costs should you check?
What it means
A remortgage is not just about the headline rate. You may need to check for early repayment charges (ERCs) on your current deal, plus any arrangement, valuation, legal, or admin fees on the new one. Some deals include free valuation or legal work, but not all do.
Example or Key Point
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You usually do not calculate APRC manually. Instead, use these steps when you read the lender illustration:
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Is the headline interest rate the only cost to compare?
6) What will lenders look at?
What it means
When you remortgage, lenders will usually assess your income, outgoings, credit profile, property value, and how much you want to borrow compared with the home’s value.
Example or Key Point
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Before seeking an AIP/DIP, self-check your readiness:
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Do lenders check your credit profile when you remortgage to a new lender?
7) When might a remortgage not be worth it?
What it means
A remortgage may not be the right move if the savings are cancelled out by ERCs or fees, or if your current lender offers a product transfer that is just as competitive without the extra hassle.
Example or Key Point
🧮 Quick calculator?
Estimate your Early Repayment Charge (ERC):
✍️ Mini exercise
Should you stay with your current lender if their rate matches market deals?
In plain English
A remortgage is simply replacing your existing mortgage with a new one on the same property. People usually do it to get a better deal, avoid a higher follow-on rate, or reshape their borrowing. The smart way to judge it is not “is the rate lower?” but “is the new deal better overall once I include fees, ERCs, affordability, and how long I expect to keep it?”
Quick FAQs
Do you have to move house to remortgage?
No. Remortgaging normally means changing the mortgage on your current property while staying in the same home.
Can you remortgage with the same lender?
In everyday conversation people often say yes, but lenders usually describe that as a product transfer or rate switch rather than a remortgage with a new lender.
When should you start looking?
MoneyHelper says it is sensible to start reviewing deals around six months before your current fixed or discount deal ends.
Can you borrow more when remortgaging?
Sometimes yes, but the extra borrowing is still secured against your home and is subject to lender checks and affordability.