How Remortgaging Works: Step by Step

Step 1: Review Your Current Mortgage

The first step is to understand your existing mortgage. Check when your current introductory deal ends, what your outstanding balance is, and whether any early repayment charges (ERCs) would apply if you switched early. You can find this information on your latest mortgage statement or by contacting your lender.

Knowing your current terms is essential because it helps you work out whether remortgaging will genuinely save you money. If you have significant ERCs remaining, it may be worth waiting until they expire before making a move.

You should also get an idea of your property's current value, as this determines your loan-to-value ratio and the rates you will be offered.

Step 2: Compare Deals and Apply

Once you know your current position, you can start comparing remortgage deals. You can do this through comparison websites, directly with lenders, or with the help of a mortgage broker. A broker can be particularly helpful because they have access to deals from across the market, including some that are not available directly to consumers.

When comparing deals, look beyond the headline interest rate. Consider the overall cost including arrangement fees, valuation fees, and any cashback or incentives. A slightly higher rate with no fees can sometimes work out cheaper than a rock-bottom rate with hefty upfront costs.

Once you have found a deal you are happy with, you submit a full mortgage application. The lender will carry out a credit check and ask for various documents to verify your income and outgoings.

Step 3: Valuation and Legal Work

After your application is submitted, the new lender will arrange a valuation of your property. This may be a physical visit or a desktop valuation carried out remotely. The purpose is to confirm the property is worth enough to support the loan.

At the same time, the legal work begins. If you are switching to a new lender, a solicitor or conveyancer will handle the transfer of the mortgage from one lender to another. Many remortgage deals include free legal work, meaning the new lender covers this cost. Your conveyancer will carry out property searches, check the title deeds, and prepare the legal documents needed for completion.

This stage typically takes two to four weeks, depending on the complexity of the case and how quickly all parties respond.

Step 4: Mortgage Offer and Completion

Once the lender is satisfied with the valuation and your application, they will issue a formal mortgage offer. This document sets out the terms of your new mortgage, including the interest rate, monthly payment amount, and any conditions.

You should review the offer carefully and raise any queries before proceeding. Your solicitor will also review it and, once everything is in order, arrange a completion date. On completion day, the new lender pays off your old mortgage and your new deal begins.

From this point, you simply start making payments to your new lender. The whole process from start to finish usually takes four to eight weeks, though it can be quicker if everything runs smoothly.