Remortgaging Explained: How to Switch and Save

Letting your mortgage drift onto the lender's standard variable rate is one of the most expensive mistakes British homeowners make. Tens of thousands of people quietly overpay every year because they didn't remortgage in time.

Done right, remortgaging is one of the highest-value financial moves you can make. It can save hundreds of pounds a month — and the process is usually less hassle than people imagine. Here's how it works.

What is remortgaging?

Remortgaging is switching your existing mortgage to a new deal. That deal can be with the same lender (called a "product transfer") or with a completely different lender (a "full remortgage"). The aim is usually to get a better interest rate, but it can also be to release equity, change the term, or restructure the loan.

You don't move house. The property is the same. Only the mortgage product changes.

Most UK fixed and tracker mortgages have deal periods of 2 to 5 years. When that period ends, you can either remortgage to a new deal — or stay on the lender's standard variable rate, which is almost always much higher. Remortgaging at the end of every fixed period is how most homeowners avoid the SVR trap.

Why do people remortgage?

The main reasons:

• Avoid the SVR. Standard variable rates are typically 2-4 percentage points above current deal rates. Falling onto an SVR can cost hundreds of pounds a month.
• Lock in a better rate. If market rates have fallen, or your loan-to-value has improved, you may be able to access better deals.
• Change the term. Shortening the term to clear the mortgage faster, or lengthening it to lower monthly payments.
• Release equity. Borrow more against the property to fund improvements, consolidate debt, or for other purposes.
• Switch from interest-only to repayment (or vice versa).
• Move from a tracker to a fixed (or vice versa) to change your rate exposure.

Use our remortgage calculator to see the potential savings of switching from your current deal.

When is the right time to remortgage?

The classic time is about two to six months before your current fixed or tracker deal ends — early enough to get a deal lined up, late enough that the new deal will start as close as possible to your current one ending.

Other moments worth considering:

• Your LTV has dropped into a better band. If your property value has risen or you've paid down the mortgage, you might now qualify for cheaper deals.
• Interest rates have fallen significantly. Even with an ERC to pay, switching mid-deal can save money.
• Your circumstances have improved. Higher income, paid-off debts or better credit can all unlock better products.
• You want to release equity. Remortgaging for additional borrowing can be cheaper than a personal loan for large amounts.

The wrong time is usually anywhere mid-deal when no factor has changed meaningfully — the ERC will eat most of the savings.

How early should you start looking?

Six months ahead of your current deal ending is the sweet spot. Most lenders will let you secure a new deal up to six months in advance, which means you can lock in a known rate before any market movements.

If rates fall during those six months, most lenders will let you switch to the better rate without penalty. If rates rise, you've already locked in the better deal. There's no real downside to starting early.

Practical steps from six months out:

1. Check your existing mortgage details: current rate, end date, ERC structure, outstanding balance
2. Get an idea of your property's current value (rough — Zoopla estimates or local sold prices)
3. Work out your current LTV
4. Run a soft-search comparison or speak to a broker
5. Apply for the new deal once you've chosen one
6. Aim for completion right as your current deal ends

The remortgaging process step by step

For a full remortgage (switching lender):

1. Decide what you need: rate type, term length, any additional borrowing
2. Compare deals — direct, through comparison sites, or via a broker
3. Apply to the chosen lender. They'll do a credit check and affordability assessment.
4. Property valuation — usually free, often a desktop valuation rather than physical visit
5. Mortgage offer issued (usually 2-4 weeks from application)
6. Legal work — most lenders offer free legals for remortgages, using their preferred conveyancer
7. Completion — the new lender pays off your old mortgage and starts the new one

From start to finish, a full remortgage typically takes 6-8 weeks. A product transfer is much faster — often a few days.

Product transfer vs full remortgage

The choice between staying with your existing lender (product transfer) or moving to a new lender (full remortgage) is one of the most important decisions in remortgaging.

Product transfer pros:

• Faster and simpler — usually no new affordability check
• No legal fees
• No valuation
• Lower fees overall

Product transfer cons:

• You only see your existing lender's deals
• Often not the cheapest option on the market

Full remortgage pros:

• Access to the whole market
• Often significantly better rates
• You can change loan structure, additional borrowing, term

Full remortgage cons:

• More paperwork
• New affordability check
• Longer process

The smart approach: get a quote from your existing lender first, then compare it with deals from other lenders. If a full remortgage saves you significantly even after fees, switch. If the savings are marginal, the simpler product transfer is often the right answer.

Early repayment charges — when they apply

If you remortgage before your current deal ends, you'll usually pay an early repayment charge (ERC). For fixed-rate mortgages this is often a percentage of the outstanding balance — typically:

• Year 1: 5% of balance
• Year 2: 4%
• Year 3: 3%
• Year 4: 2%
• Year 5: 1%

On a £200,000 balance, even a 1% ERC is £2,000. A 5% ERC is £10,000. That's enough to wipe out years of savings from a better rate.

Some lenders waive ERCs in specific circumstances (moving home, partner's death). Always check your actual deal documents for the exact terms. The decision to remortgage mid-deal should always include the ERC in the calculation.

The costs of remortgaging

For a typical full remortgage, expect:

• Arrangement fee: £0-£1,500. Sometimes adds to the loan rather than paid upfront.
• Valuation fee: Usually free for remortgages.
• Legal fees: Often free with lender-appointed solicitors. Otherwise £300-£800.
• Broker fee: £0-£700 depending on broker.
• Exit fee from old lender: Usually small (£50-£300).
• ERC on current deal: Variable. Big if you're early in a fix.

For a product transfer, most of these costs vanish. Expect just a small arrangement fee at most.

Always compare total cost over the deal period, not just the headline rate. A 4.5% rate with a £0 fee can beat a 4.2% rate with a £1,500 fee on smaller loans.

When remortgaging might not be worth it

A few situations where remortgaging is the wrong move:

• You're well into a fixed deal with high ERCs. The penalty wipes out the savings.
• Your circumstances have got worse. A new affordability check might mean a lower borrowing amount or a refusal.
• Your mortgage balance is very small. The savings from a rate cut might not justify the fees.
• You're planning to move soon. If you'll be selling within a year, the costs of remortgaging may not pay off.

In these cases, a product transfer with your existing lender, or simply riding out the rest of your current deal, can be the smarter choice.

How to find the best remortgage deal

Three routes, used together:

1. Get your existing lender's offer. Log in and check their product transfer rates. This is your baseline.
2. Compare market deals. Use comparison sites for an overview. The headline rates aren't necessarily the deals you'll be offered, but they show the shape of the market.
3. Speak to a mortgage broker. A whole-of-market broker can compare deals across the lenders you wouldn't see directly, and run soft searches before committing.

For most people the optimal is: broker + product transfer comparison + reality-check using a calculator. The total savings from going through this process can easily run into thousands of pounds across the life of the deal.

Frequently asked questions