1. Review your current mortgage
It’s important to know the terms of your current mortgage before you consider other deals. For example, will your current lender charge you an exit fee for moving your mortgage? Or an early repayment charge? This could be thousands of pounds if your current mortgage deal hasn’t ended, so you need to weigh up whether you’d actually be better off by remortgaging. Check the documents you received from your current lender or contact them for details.
2. Decide what you want from a new mortgage
There are hundreds of mortgage deals available in the market, so you should take the time to consider what you want to achieve by remortgaging. Do you want to lower your monthly payments? Or have the flexibility to pay off your mortgage sooner? If your circumstances have changed, you may want to change the type of mortgage you have – eg, move from a variable rate to a fixed one so you can be confident of what your future mortgage payments will be.
3. Work out how much you can borrow
You can use a mortgage calculator to see how much you’d like to borrow and what your monthly payments may be.
4. Consider the potential costs involved in remortgaging
To make sure you’ll be better off financially by remortgaging, you should take into account all the costs that this could involve, for example:
- Exit fee – your current lender may charge this to cover their administrative costs
- Early repayment charges – you may need to pay this if your current mortgage deal hasn’t ended
- Application fee – what your new lender may charge to set up your new mortgage. Also referred to as an arrangement, product or booking fee
- Valuation fee – your new lender will need their own valuation of your property
- Solicitor’s fee – you’ll need a solicitor to manage the transfer of your mortgage to a new lender
You should speak to both your current and new lenders to find out exactly what fees may apply to you.
5. Compare mortgage deals
Once you know what you want from your new mortgage, and how much you can borrow for it, you can compare the mortgage deals available on the market. Comparison websites are helpful for this, or you can get professional advice from a specific lender or mortgage broker1.
6. Complete an Agreement in Principle
Once you know which lender you’d like to move your mortgage to, you should complete an Agreement in Principle. Within a matter of minutes you’ll be able to see whether the lender would be willing, in principle, to lend you the amount you want.
7. Apply for your new mortgage
Once you get an Agreement in Principle, you can apply for your new mortgage. As with your current mortgage, the application will involve providing information about your personal and financial circumstances, as well as details of your current mortgage.
8. Next steps
As with your current mortgage, your new lender will carry out a credit check to confirm your current circumstances and arrange for your property to be valued. A solicitor or conveyancer will need to be appointed to handle the transfer of your mortgage to the new lender. You may also want to take the opportunity to review your insurance needs, especially if your property has increased in value.
Depending on the complexity of your remortgage, the entire process could take between 4 and 8 weeks.