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Day-One Remortgages

A Guide to Everything You Need to Know About Day 1 Remortgages

No impact on credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: August 25, 2021

Day-one mortgages are difficult to get, but by no means impossible. With professional advice on your side, refinancing a property right after you’ve bought it is a reality, under specific circumstances.

In our guide to day-on remortgages, we’ll explain when this is possible, how to go about refinancing your mortgage so quickly, and why you should seek expert advice from a broker who specialises in remortgages if you’re considering this.

What is a day 1 remortgage?

A day-one remortgage is a financial product that allows you to remortgage a property you own immediately after you purchased it. This could be within one day of completion, as the name suggests, but it might also be within the first six months of ownership.

Traditionally, most mortgage providers do not offer a remortgage facility within six months of a homeowner completing on a property. In fact, some may ask for twelve months before this will be considered.

The six-month mortgage rule was introduced by the Council of Mortgage Lenders (CML) in the aftermath of the 2008 financial crash in order to properly regulate any questionable practices which could lead to a homeowner falling into negative equity.

However, there are a number of legitimate reasons why someone may want to raise funds within this six-month timescale. In order to meet this demand, a host of lenders now offer day one remortgages whilst adhering to strict CML guidelines.

How do they work?

Day one remortgages work along similar lines to traditional remortgages. The main difference between the two is verifying the ownership of the property. If it is not yet showing at the Land Registry with your details as the owner you can request confirmation from the solicitor who acted on your behalf during the sale/purchase process.

The loan to value (LTV) will vary from lender to lender. Most lenders will offer a LTV of between 75%-85%, some will go as high as 90%-95% and a few may be prepared to go as high as 100% in exceptional circumstances.

Are they available for buy-to-let properties?

Yes. Day one remortgages are available for both residential and buy-to-let properties, either on an interest-only or capital and interest basis. Interest rates can be higher on these agreements, compared to standard remortgages.

If you’d like to know more about how day 1 remortgages work and the different types of loans available, make an enquiry and we can arrange for a specialist to get in touch to discuss this further with you.

Why would I use a day-one remortgage?

The type of scenarios where you may require a day 1 remortgage could include:

  • Needing to remortgage to release equity to buy another property quickly (to beat the competition or through an auction, for example) using cash reserves borrowed from a family member or friend and now need to raise funds to repay this amount
  • You may have been gifted a property through inheritance and want to raise funds using your newly acquired home as security
  • You’ve used your own cash reserves to buy a property but now need to remortgage for home improvements

How do I get the best rates?

Typically, the strongest remortgage applications will be able to access the best interest rates and day 1 remortgages are no different. There can be a number of other factors that may affect the interest rate available for a day-one remortgage, such as:

  • Property type: Every lender is different, but many don’t accept property that is non-standard, unique, or listed property, generally because they fear the properties are higher risk and less sellable. That said there are lenders that are happy to consider a wide range of property types. For more information on this see our non-standard property section.
  • Credit History: A poor credit record will likely have a detrimental effect on your application and certainly influence the interest rate you may have to pay. This will vary from lender to lender as they all adopt different rules. Some lenders will not accept such applications whereas others will consider them depending on the circumstances.
  • Equity: The amount of equity in your property can be a pivotal factor as this will serve as your mortgage deposit. The more you have, the more likely you are to land the best rates.
  • Speak to a remortgage broker: A broker who specialises in remortgages will know exactly which lenders to approach for the best deals. They can match your profile as a borrower with the lender best positioned to offer you favourable rates on a day-one remortgage.

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How to get a day-one remortgage

Since they’re niche products, it’s a good idea to seek professional advice from a broker who specialises in remortgages. The right mortgage broker for you will know exactly which lenders to match you with for a day-one remortgage, and this will boost your chances of saving time and money in the long run.

We offer a free broker-matching service that will assess your needs and circumstances and pair you up with an advisor who has the exact knowledge and experience that you need. This will be a broker we’ve hand-picked and matched you with because of their impeccable track record helping customers just like you.

Call 0808 189 2301 or make an online enquiry for a free, no-obligation chat with your ideal broker today.

Speak to a day one remortgages expert

Day 1 remortgages are a very useful form of lending, particularly if you have unexpectedly inherited a property or used all of your cash reserves on a purchase and now need to raise funds in order to carry out essential renovations.

If you’d like to speak with someone who can offer assistance with this form of lending call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry.

The advisors we work with have a wealth of experience in areas such as this and deal with customers in your situation all the time.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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