How to Remortgage Your Home

Remortgaging is when you move your existing mortgage to a new provider while you live in the same property.

The new mortgage then replaces your old one. Common reasons why people decide to remortgage include:

• your existing mortgage deal is coming to an end
• you’ve found a better deal elsewhere
• the value of your home has increased since you’ve bought it
• you want to borrow more money
• you’re concerned about interest rates rising and want to change your interest rate type

If you move to a different mortgage but stay with the same lender, this is called a “product transfer.”

Generally speaking, the remortaging process follows these steps:

1. Find out how much you need
You’ll need to work out how much your home is worth and check how much money you still owe on your mortgage.

For example:

• You bought your home at a value of £250,000 and got a mortgage of £200,000, which is an 80% loan to value (LTV)
• You have since paid off £50,000 and have a remaining mortgage balance of £150,000 but your property is now worth £300,000
• When you remortgage you’ll only need to borrow the remaining £150,000 so the LTV will be 50% rather than 80%.

2. Compare mortgage deals
Once you have an idea of how much you’ll need, start comparing mortgage deals. Remember to look out for any fees you’ll need to pay.

Price comparison websites are a great place to start as they help you compare lots of deals quickly.

You could also consider a mortgage broker to help you find suitable deals, however, this often comes with a fee.

3. Apply for an Agreement in Principle
An Agreement in Principle (AIP) is a gives you a rough indication of what remortgaing deals you might qualify for.

It’s not a guarantee but could help you understand how much you could before making your official mortgage application.

It’s usually obligation-free and only involves a soft credit check, meaning it won’t show up on your credit file.

You’ll usually need to provide information about your:

• income
• outgoings
• addresses for the last three years

The application process usually takes around 10 minutes to complete. And your AIP is valid for around 30 – 90 days.

4. Apply for a deal
Once you’ve compared different deals and have an idea of what you’re likely to be offered from a lender, it’s time to make a formal application.

When applying for a mortgage deal you’ll need to follow the lender’s process and provide ID and documents to support your application.

This includes your passport, recent bank statements, household bills, proof of your existing mortgage and the value of your home.

They’ll also review your credit history and how well you’ve managed repaying what you owe in the past.

5. Complete your remortgage
The lender will review your application and contact you with their decision or if more information is needed.

Your lender will also carry out a full credit check and arrange for your home to be valued. You’ll need a solicitor or conveyancer to handle the transfer of your mortgage from one lender to another.

A poor credit history doesn’t necessarily stop you from being able to remortgage.

The lender will review how well you’re coping with the existing mortgage repayments and other forms of credit you have such as credit cards and personal loans.

Taking time to improve your credit history where possible could help you unlock more competitive interest rates on your mortgage which could make it cheaper.

Some of the ways you can boost your credit score include:

• Registering to vote
• Keeping up with existing repayments
• Check your credit report for errors
• Use eligibility checkers before applying for credit