Remortgaging: when to do it, how to do it, and what it costs
Remortgaging means switching your mortgage to a new deal — either with your existing lender (a product transfer) or with a different lender. The most common reason is that a fixed-rate deal is ending and the alternative — sliding onto the SVR — is significantly more expensive.
The SVR trap: why timing matters
When your fixed-rate period ends, you automatically move to your lender's Standard Variable Rate. SVRs are typically 2–4 percentage points above the Bank of England base rate and are almost always more expensive than available remortgage products.
On a £200,000 mortgage, the difference between a 4.5% deal rate and a 7.5% SVR is approximately £340/month in higher payments. Every month on the SVR costs you that difference.
When to start looking: the 3–6 month window
Most lenders allow you to lock in a new mortgage rate up to 6 months before your current deal ends, with the new deal starting when the old one expires. This means:
- You can secure a rate today without paying any ERC (you're not leaving early)
- If rates fall before your completion date, many lenders allow you to switch to the better rate
- Starting too close to the end date risks a period on the SVR while the application processes
Check your mortgage statement or original offer letter for the exact end date of your current deal.
Product transfer vs full remortgage
A product transfer is switching to a new deal with your existing lender. It is typically faster, involves less paperwork, and usually does not require a new property valuation. The lender does not need to re-underwrite the mortgage. However, you are limited to that lender's product range and may not be getting the best available rate in the market.
A full remortgage involves applying to a new lender. This is more paperwork — income verification, bank statements, property valuation — but opens up the entire market. Arrangement fees may apply (typically £0–£1,500), though some lenders offer fee-free deals with a slightly higher rate instead.
Early Repayment Charges (ERCs)
If you want to remortgage before your current fixed period ends, you will likely face an ERC. ERCs are expressed as a percentage of the outstanding balance:
- A 2% ERC on £200,000 is £4,000
- ERCs typically reduce each year (e.g. 5%/4%/3%/2%/1% on a 5-year fix)
- If the rate saving is large enough, the maths can still favour remortgaging even with an ERC — use the to check
Arrangement fees and the rate vs fee trade-off
Some of the lowest headline rates come with arrangement fees of £999–£1,499. A fee-free deal at a slightly higher rate may work out cheaper over a short deal period (2 years), but a deal with a fee may save more over 5 years. The correct comparison is: (fee ÷ monthly saving) = months to break even. See the Remortgage Savings Simulator to run this comparison.
Broker vs direct
A whole-of-market mortgage broker searches across all lenders, including those that do not appear on comparison sites. Brokers are regulated by the FCA. Many charge a fee (typically £300–£500) though some receive a lender commission and charge the borrower nothing. MoneyHelper (moneyhelper.org.uk) has a free tool to find a regulated broker.