Is Now A Good Time To Remortgage?

In the current housing market, homeowners nearing the end of their mortgage deals face a crucial decision: to remortgage or not, especially against a backdrop of fluctuating interest rates and economic uncertainty.

This article explores whether now is an ideal time to remortgage, weighing the potential benefits and risks.

We’ll explore remortgaging’s potential benefits and drawbacks in today’s economic climate and how to navigate the complexities of switching deals or lenders.

While this guide aims to provide you with valuable knowledge, consulting with a qualified professional is essential to make an informed decision that aligns with your financial goals and current market conditions.

What does remortgage mean?

A remortgage involves applying for a new mortgage while staying in your current home. You can do this with your existing lender or by moving to a different one if they offer better terms. You can choose to remortgage the remaining balance or potentially increase your borrowing using equity in your property.

Remortgaging typically becomes an option when you approach the end of a particular interest rate offer period, whether it’s a fixed-rate offer or a variable rate. This allows you to find a new deal rather than remaining on your existing lender’s standard variable rate (SVR).

Here’s a quick guide to some key terms:

• Remortgage: Switching your existing mortgage to a new deal, either with your current lender or a different one, to take advantage of better interest rates, adjust your loan terms, or borrow additional funds against your home’s equity.
• Fixed-Rate Mortgage: A type of mortgage where the interest rate remains the same for a set period, typically 2, 5, or 10 years, providing stability as your monthly repayments won’t change.
• Standard Variable Rate (SVR): The interest rate you’re automatically moved onto after your fixed-rate, tracker, or discount mortgage deal ends. SVRs are set by the lender and can go up or down at any time, often influenced by changes in the Bank of England base rate.
• Tracker Mortgage: A tracker mortgage is a type of mortgage where the interest rate is linked directly to the Bank of England base rate or another external rate, meaning your monthly payments could vary over the deal’s term.
• Discount Mortgage: A discount mortgage is a variable-rate mortgage where the interest rate is set below the lender’s SVR for a fixed period, offering potential savings compared to the lender’s standard rate.
• Equity: The portion of your property that you truly “own,” meaning the difference between the property’s value and the amount you still owe on the mortgage.

Should you remortgage now or wait?

Remortgaging is often aimed at saving money on your repayments by finding a better—cheaper interest rate deal than the one you had before. The challenge for anyone remortgaging now is the uncertainty surrounding interest rates.

This means that anyone whose current deal is about to expire may have to accept that their repayments are likely to increase rather than decrease, regardless of what new deal they qualify for.

While this increase may place more pressure on your monthly outgoings, remember that remortgaging aims to minimise the impact of potential future rises in interest rates. Focus on minimising future costs based on your current rate rather than comparing rates you may have had.

Since August 2024, the base rate has been cut multiple times and is currently 3.75% (July 2026). So, if the rate continues to drop, the repayments on a potential remortgage could drop.

One thing to bear in mind is that if you have a fixed-rate mortgage, you might have to pay early repayment charges if you remortgage before the end of your term. It’s worth checking with your lender and consulting a broker to ensure it makes sense to remortgage early if this is what you plan to do.

They can look at your circumstances and consider whether paying early repayment charges is more financially viable than sticking with your current rate until the end of your term.

How long does a remortgage take?

A solid timeframe to work towards for a remortgage is typically between 4-8 weeks. If you stick with your existing lender, the process should, in theory, be quicker and more straightforward. This would be considered a product transfer rather than a full remortgage, often eliminating the need for a solicitor since no legal work would be involved.

However, in the current market, it’s important not to dismiss the opportunity to consider moving your mortgage to a lender offering better terms purely for the sake of speed.

If the goal is to save money, the best way to achieve that is by conducting a thorough comparison of all the current remortgage deals available. An experienced remortgage broker can help you do this efficiently.

How long does it take to refinance and release equity?

If you’re looking to release equity from your property, the timescales mentioned above generally apply, though you may find it takes closer to 8 weeks. In this case, a solicitor will be required to complete your remortgage, as a valuation and new mortgage offer will be needed. Your solicitor will handle the legalities surrounding the equity release and the signing of the new mortgage deed.

On a positive note, if the value of your home has risen significantly since you took out the original mortgage, your loan-to-value ratio may have improved, making you eligible for more competitive interest rates.

Remortgage calculator

If you want a quick snapshot of how this could all look for you in terms of repayments when you remortgage, you can use our calculator below. Simply input the details for your property and current mortgage and the calculator will do the rest.

Your broker will be able to provide a more accurate picture, using the best current offers available in the market.

Remortgaging checklist

If you’re thinking of remortgaging soon or for the first time, use this handy checklist to guide you through the process:

1. Evaluate Your Current Mortgage

• Review the terms of your existing mortgage, including the interest rate, type (fixed, variable, tracker), and any early repayment charges you might have to pay.
• Determine the remaining balance and how much of your home you own outright (equity).

2. Assess Your Financial Goals

• Decide what you want to achieve by remortgaging. Examples include lower monthly payments, a shorter mortgage term, or releasing equity for large expenses.

3. Research the Market

• Compare current mortgage deals available from various lenders, focusing on interest rates, terms, and eligibility criteria.
• Consider the rates and fees associated with remortgaging to understand the overall cost.

4. Check Your Credit Score

• Ensure your credit report is up-to-date and accurate. A higher credit score can help you secure better mortgage deals.

5. Calculate the Potential Savings

• Use our calculators to estimate how much you could save by switching to a new mortgage deal, taking into account any fees and penalties.

6. Consult a Mortgage Broker

• A good broker can offer expert advice, find deals that match your needs, and help navigate the application process.
• Discuss your financial situation and goals to get tailored recommendations.

7. Prepare Your Documents

• Gather necessary documentation, including proof of income, identification, and details of your current mortgage.
• Organise financial statements and any other documents required by the new lender.

8. Consider the Timing

• If your current deal is about to expire, timing your application can help avoid moving to a higher standard variable rate (SVR).
• Plan for any early repayment charges and how they affect your decision to remortgage now or wait.

9. Apply for the New Mortgage

• Once you’ve chosen a deal, proceed with the application. Your broker can assist with this process, ensuring it’s as smooth as possible.

10. Legal and Valuation Checks

• Your new lender will likely require a property valuation and legal checks. Be prepared for these steps, which can affect the timeline and cost of remortgaging.

11. Review the Offer

• Carefully read through the mortgage offer from the new lender. Ensure it meets your expectations and financial goals.

12. Finalise the Remortgage

• Once you accept the offer, your solicitor and the lender will complete the legal work to transfer the mortgage.
• Confirm the start date of your new mortgage and the cancellation of your old one.

Following this checklist can help streamline the remortgaging process, ensuring you’re well-prepared and informed at every stage.

Is it worth paying exit fees?

If your current deal ends within 6 months, the good news is that most lenders allow you to reserve a new fixed-rate deal now, which you’ll automatically switch onto when your current deal ends, without paying an exit fee.

While this new rate might be higher than your current one, it’s still likely to be lower than the standard variable rates and fixed rates available in the foreseeable future. If you’re more than 6 months away from the end of your deal, you may incur an exit fee to leave your current deal.

This is where it becomes a more challenging decision. You’ll need to weigh whether the exit fees are worth paying to secure a rate that might not be available later. If interest rates continue to rise, paying the exit fee might be a valid expense, but it’s crucial to calculate this carefully, possibly with the help of a mortgage broker.

If you need assistance, we can introduce you to a broker we work with. They’ll be able to look at all the options available to you and determine whether remortgaging now could save you money compared to waiting.