How to get the best remortgage deals

The best remortgage deals will depend on how much you want to borrow, your credit score and your ability to repay the loan. Therefore, getting your finances in order is imperative. Using a mortgage comparison service will also help you find the best remortgage deals around.

But is remortgaging the best option and what can you do to increase your chances of successfully securing the best remortgage rates?

The following information explains how remortgaging works, why so many people do it and how to find the best remortgage deals.

Compare the best remortgage deals

What is remortgaging?

A remortgage is when you take out a new mortgage on the property you own. Basically, paying off your existing mortgage with a new mortgage deal, provided by either your current mortgage lender or a new provider.

So, in the same way you shop around for the best bank account, energy supplier or insurer, remortgaging is another way you can take control of your finances.

What are the best remortgage deals for over 50s?

To find the best remortgage deals for over 50s, you will need to prove you are credit worthy and demonstrate your ability to repay the loan. Mortgage deals are readily available for those remortgaging in their 50s, however it does get harder to find a lender the older you get.   

Therefore, regardless of whether you are over 50, over 60 or over 70, to find the best remortgage deals, you may want to speak to a mortgage specialist like London & Country. They provide free advice and can help you review your remortgaging options.

How long does it take to remortgage?

Subject to references and property valuation remortgaging usually takes between 4 to 6 weeks. The legal work for remortgaging is quick and straight forwards and often free as part of the deal. Make sure you know when your current mortgage deal comes to an end to maximise the financial savings.

Why do people remortgage their home?

People remortgage their home for many reasons, although the main objective is usually to either save money or release funds. For example, to:

  • Move to a better deal with lower interest rates
  • Change from an interest only mortgage to a repayment mortgage
  • Change to a new mortgage deal as their old one has ended
  • Release equity and borrow more money
  • Reduce monthly mortgage payments
  • Consolidate debts
  • Provide financial stability
  • Repay the mortgage sooner

How does remortgaging work?

When you remortgage your home, you swap your existing mortgage for a new one. Therefore, you need to be certain that remortgaging is financially viable, find a mortgage deal that is better than your current one and convince your new lender that you are worthy applicant.

To establish whether remortgaging is a good idea, check if you’ll incur charges for ending your existing mortgage. Also take into consideration product and professional fees. If these additional costs outweigh the benefit of moving to a better mortgage deal, remortgaging may not be such a good idea.

You should also review your financial status to ensure you’re mortgage ready. The fact you have a mortgage doesn’t mean your lender won’t go through the same affordability checks when you remortgage. Therefore, a healthy credit score is a must and proof you have sufficient funds to repay the loan.

Remortgaging in retirement

You can remortgage when you retire however you’ll need an excellent credit rating and to demonstrate you can make your repayments through pensions, annuities and investments. They’ll be fewer lenders to choose from and the remortgage terms will be shorter, which is where later life mortgages could help.

You loan to value ratio will also help as the lower the risk, the more likely you will be accepted by the lender.

How to calculate your loan to value ratio?

The loan to value ratio is the value of the mortgage loan as a percentage of the property value. For example, if you had a property worth £300,000 with a mortgage of £240,000, your loan to value would be 80%.

Basically, the higher the loan as a percentage of the property value, the greater the risk to the lender. So LTVS below 80% are considered low risk whereas anything above 85 to 90% is considered higher risk, which in turn usually equates to higher remortgage rates.

How much does it cost to remortgage?

The amount it will cost to remortgage your home will depend on both your current and new mortgage. Firstly, you may face early repayment charges for leaving your current mortgage deal. Then, for the new mortgage there could be arrangement and legal fees plus valuation and broker fees.

Some remortgage costs may be included in the deal, so worth looking out for. Also, arrangement fees can either be paid up front or added to the mortgage. However, don’t forget, adding these remortgage costs to your mortgage will be more expensive as you will be charged interest.   

How to find the best remortgage rates?

To find the best remortgage rates you could use an online service such as MoneySuperMarket, ComparetheMarket and Money.co.uk. Also seeking advice from a qualified broker could prove invaluable, especially if like London & Country, Habito and Trinity Financial, their services are free.

You may also want to use one of the many online remortgage calculators to understand the financial impact of switching to the best remortgage rates

What is a remortgage calculator?

A remortgage calculator tells you how much money you could save by remortgaging. Depending on the calculator you use, it may also show how much you could borrow and what your monthly repayments would be. Basically, a remortgage calculator is a great place to start but it’s only a guide.

A mortgage broker will be able to give you a more accurate view of what you can achieve by remortgaging and whether it is worthwhile.

What should I do now?

When you are ready to compare remortgages, London & Country’s free mortgage advice service is a great place to start.

Alternatively, for more information on mortgages, read our helpful guides.

Compare remortgage deals

Frequently asked remortgage questions

Is it better to get a loan or remortgage?

Whether it is better to get a loan or remortgage will depend on several factors. You may be able to borrow more by remortgaging and your monthly payments will be cheaper as they will be spread over the term of your mortgage.

However, a loan will probably work out cheaper because you won’t be paying it for so long and therefore won’t incur as much interest. Also, a loan is quicker to arrange and you won’t have to pay remortgage fees.

How can I get a better remortgage deal?

To get the best remortgage deal you could speak to one of the free mortgage broker services such as London & Country, Habito and Trinity Financial.

Do you need a solicitor to remortgage?

You shouldn’t need a solicitor to remortgage if you are switching to a new mortgage deal with your current lender. However, if you are remortgaging your home with a new lender, you will need the services of a solicitor.

What is the best remortgage rate?

The best remortgage rate will depend on several factors:

  • The size of the mortgage
  • Your loan to value ratio
  • Your age
  • The mortgage term

Then of course your acceptance will depend on your financial status.

Can you remortgage for free?

The cost of remortgaging can include arrangement, legal, valuation and broker fees however some of these may be free as part of the mortgage deal.

You should also establish whether you will face early repayment charges for leaving your current lender.

How much can I borrow for a remortgage?

To see how much you could borrow through remortgaging your home, use one of the online remortgage calculators or speak to a broker like London & Country who offer free mortgage advice.

Can I remortgage with the same lender?

Yes, you can remortgage with the same lender, sometimes known as “switching” to another mortgage product. Whilst this can be quicker and cost less in fees, you could get a better deal elsewhere, so it pays to shop around before remortgaging with the same lender.

Updated 30th June 2020
by Ashley Shepherd
Ashley Shepherd

Ashley is the founder and managing director at Over50choices. With over 30 years’ experience in financial services, he has held senior roles in building societies, banks and insurance companies.

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