Remortgage FAQs

Common Questions About Remortgaging Your Home

Your mortgage is likely to be one of your largest financial commitments, so it makes sense to review it from time to time rather than simply leaving it unchanged.

For many homeowners, the most obvious time to review their mortgage is when a fixed or introductory deal is approaching its end. However, there can be other reasons to consider remortgaging, including changing the mortgage term, borrowing additional funds or reviewing whether the existing mortgage still suits your circumstances.

At Cambs Ely Mortgages, we help homeowners understand the options available before making a decision.

Below you'll find answers to some of the most common questions we receive about remortgaging.

Every situation is different. The options available will depend on your existing mortgage, property value, outstanding balance, income, credit history and lender criteria.

Understanding Remortgaging

What is a remortgage?

A remortgage generally involves replacing your existing mortgage with a new mortgage, usually with a different lender, while remaining in the same property.

The new mortgage is used to repay the existing mortgage.

Homeowners may remortgage to review their interest rate, change the mortgage structure, alter the mortgage term or potentially borrow additional funds.

Do I have to change lender to remortgage?

A remortgage normally refers to moving the mortgage to another lender.

If you stay with your existing lender and move onto another mortgage product, this is commonly known as a product transfer or product switch.

Both options can be worth considering when your existing mortgage deal is approaching its end.

Why do people remortgage?

There are many possible reasons.

You may be approaching the end of a fixed-rate deal, want to review your monthly payments, change your mortgage term or investigate borrowing additional money.

The important question isn't simply whether you can remortgage, but whether doing so is appropriate once the costs and implications are considered.

Do I have to remortgage when my fixed rate ends?

No.

If you take no action, your mortgage will normally move onto the lender's applicable follow-on rate when your existing deal ends, subject to the terms of your mortgage.

You may instead be able to select another product with your existing lender or remortgage to another lender.

Reviewing the alternatives before your current deal ends gives you time to understand your options.

When to Review Your Mortgage

When should I start thinking about remortgaging?

It can be sensible to start reviewing your mortgage before your current deal expires rather than waiting until the final few weeks.

The exact timing will depend on your lender, existing mortgage and the products available.

Starting early can provide more time to understand your options, gather documents and deal with any unexpected issues.

Can I arrange a new mortgage before my current deal ends?

Potentially.

Some mortgage offers can remain valid for a period of time, allowing a future remortgage to be arranged before the existing deal expires.

However, offer validity and lender requirements vary.

The timing should also take account of any Early Repayment Charges on your current mortgage.

What happens if I leave it until my fixed rate has already ended?

You can still review your mortgage.

However, if your existing deal has expired, you may already have moved onto your lender's applicable follow-on rate.

Starting the review earlier can potentially provide more time to consider your options before that happens.

Should I review my mortgage even if I'm happy with my current lender?

It can still be worthwhile understanding the alternatives.

Your existing lender may have suitable options, but another lender may assess your circumstances differently or offer different products.

The decision should be based on the overall mortgage rather than loyalty to a particular lender.

Product Transfer vs Remortgage

What is a product transfer?

A product transfer generally means moving from one mortgage product to another with your existing lender without changing lender.

The process can sometimes be simpler than a full remortgage because your existing lender already holds your mortgage.

Is a product transfer easier than remortgaging?

It can be.

Depending on the circumstances, a product transfer may involve fewer checks than moving to a new lender.

However, this doesn't automatically mean it is the most appropriate option.

A remortgage may provide access to different products or allow other changes to the mortgage.

Is staying with my existing lender always cheaper?

No.

A product transfer may involve fewer associated costs, but the mortgage product itself also needs to be considered.

Interest rates, product fees, incentives and the overall cost during the relevant period should all be taken into account.

Can I compare a product transfer with a remortgage?

Yes.

This can be an important part of reviewing your mortgage.

Rather than assuming that staying or moving is automatically better, the available options can be compared based on your circumstances and objectives.

Mortgage Rates & Remortgaging

Should I wait for mortgage rates to fall before remortgaging?

Nobody knows with certainty where mortgage rates will be in the future.

Waiting for a particular rate movement can therefore involve risk.

Instead, it can be useful to understand what is available, what your existing mortgage will move onto and what options you may have if the market changes before completion.

If the Bank of England reduces the base rate, will fixed mortgage rates automatically fall?

Not necessarily.

Fixed mortgage pricing is influenced by more than the Bank of England base rate.

Market expectations, swap rates, lender funding costs, competition and lending appetite can all influence fixed mortgage pricing.

Mortgage rates can therefore move before, after or independently of a Bank of England base rate decision.

Can I secure a mortgage rate and change later if rates improve?

Potentially, depending on the lender, product and stage of the application.

There may sometimes be an opportunity to review the mortgage product before completion if more suitable pricing becomes available.

However, this isn't guaranteed and lender processes vary.

Should I choose the lowest remortgage rate?

Not automatically.

The interest rate is only one part of the overall cost.

Product fees, legal costs, valuation arrangements, incentives and the length of the mortgage deal should also be considered.

A mortgage with a slightly lower interest rate but a large product fee may not necessarily provide the lowest overall cost.

Early Repayment Charges

What is an Early Repayment Charge?

An Early Repayment Charge, often shortened to ERC, is a charge that may apply if you repay or change your mortgage during a specified period.

These charges are commonly associated with fixed-rate and other introductory mortgage products.

How do I know if my mortgage has an Early Repayment Charge?

Your mortgage offer, annual mortgage statement or information from your lender should explain whether an Early Repayment Charge applies.

It should also explain how the charge is calculated and when it ends.

Can I remortgage before my Early Repayment Charge ends?

Potentially, but the cost needs to be considered carefully.

Paying an ERC to leave an existing mortgage early can sometimes outweigh the benefit of moving to another product.

In other circumstances, there may be reasons why someone still wishes to proceed.

The overall financial position should be assessed rather than considering the new interest rate in isolation.

Should I pay an Early Repayment Charge to get a lower rate?

There isn't one answer that applies to everyone.

The potential saving from the new mortgage needs to be compared with the Early Repayment Charge and any other costs involved.

A lower interest rate doesn't automatically mean that paying an ERC is financially worthwhile.

Property Value & Loan to Value

Why does my property value matter when remortgaging?

Your property value helps determine your Loan to Value.

Loan to Value compares your outstanding mortgage with the value of your property.

Mortgage lenders often offer different products at different LTV bands, so the property value can affect the products available.

What if my home has increased in value?

If your property has increased in value while your mortgage balance has also reduced, your Loan to Value may be lower than when you originally arranged the mortgage.

A lower LTV can potentially provide access to different mortgage products.

However, the lender will use its own acceptable valuation rather than simply relying on an online property estimate.

What if my property value has fallen?

A lower property value can increase your Loan to Value.

This may reduce the range of mortgage products available or affect the rate available.

The impact will depend on your outstanding mortgage and the lender's valuation.

Will I need another property valuation?

A new lender will normally need to establish an acceptable value for the property.

How this is done varies between lenders and properties.

A lender may use an automated valuation, desktop assessment or physical valuation depending on its requirements.

Remortgage Affordability

Will a new lender check my affordability again?

Yes.

When moving to another lender, you are making a new mortgage application.

The new lender will normally assess your income, expenditure, existing commitments, credit history and the proposed mortgage against its current lending criteria.

I've always paid my mortgage on time. Why do I need another affordability assessment?

A good mortgage payment history can be positive, but a new lender still needs to assess whether the proposed mortgage meets its lending requirements.

Your income, expenditure, debts or household circumstances may also have changed since the original mortgage was arranged.

Can I remortgage if my income has fallen?

Potentially.

The new lender will assess your current circumstances against its affordability criteria.

A reduction in income doesn't automatically mean remortgaging is impossible, but it may affect the amount you can borrow or the lenders available.

What if my circumstances have changed since I took my mortgage?

Changes such as becoming self-employed, reducing working hours, having children, taking new credit or experiencing changes in income can affect affordability.

This is one reason reviewing both your existing lender and alternative lenders can be useful.

Credit History & Remortgaging

Will the lender check my credit history when I remortgage?

A new lender will normally carry out its own credit assessment as part of a remortgage application.

Your current credit position can therefore be relevant even if your existing mortgage has always been paid on time.

Can I remortgage if my credit history has worsened?

Potentially.

The available options will depend on the nature of the credit issue, when it occurred, the amounts involved and your wider circumstances.

Different lenders have different criteria for previous credit problems.

Can I remortgage with a default or CCJ?

Potentially.

A default or County Court Judgment doesn't automatically prevent a remortgage.

Its age, amount, status and the circumstances surrounding it can all influence which lenders may consider the application.

Should I take out new credit while remortgaging?

It is sensible to be cautious about taking on new financial commitments during a mortgage application.

New loans, car finance, credit cards or increased borrowing can affect affordability and your overall credit position.

If you're considering significant new borrowing, discuss it before proceeding.

Borrowing More When Remortgaging

Can I borrow additional money when I remortgage?

Potentially.

This is sometimes referred to as additional borrowing or capital raising.

Whether it is available will depend on affordability, Loan to Value, the reason for borrowing and lender criteria.

What can additional mortgage borrowing be used for?

Lenders have their own rules regarding acceptable purposes.

Examples may include home improvements, consolidating certain debts or raising funds for other purposes acceptable to the lender.

The reason for the borrowing must be disclosed to the lender.

Can I remortgage to pay for home improvements?

Potentially.

Some homeowners consider additional mortgage borrowing to fund renovations or improvements.

The lender will assess affordability, property value, Loan to Value and the purpose of the funds.

Can I consolidate debts into my mortgage?

Potentially, subject to lender criteria and affordability.

However, consolidating unsecured debts into a mortgage requires careful consideration.

Although the monthly payment may reduce, spreading the debt over a longer period could increase the total amount repaid.

It also converts unsecured borrowing into borrowing secured against your home.

Can I remortgage to release money from my property?

Potentially.

If there is sufficient equity in the property and the borrowing is affordable, it may be possible to increase the mortgage.

The purpose of the funds and the resulting Loan to Value will be relevant.

Changing Your Mortgage Term

Can I change the length of my mortgage when I remortgage?

Potentially.

A remortgage can provide an opportunity to review the remaining mortgage term.

You may choose to repay the mortgage over a shorter or longer period, subject to affordability and lender criteria.

What happens if I shorten my mortgage term?

A shorter mortgage term generally increases the required monthly repayment.

However, assuming the interest rate and other factors are comparable, repaying the mortgage more quickly can reduce the total amount of interest paid over the mortgage term.

What happens if I extend my mortgage term?

Extending the mortgage term can reduce the required monthly repayment.

However, borrowing over a longer period usually means paying interest for longer and can increase the overall amount repaid.

Should I extend my mortgage term to make payments cheaper?

Lower monthly payments may be helpful for affordability, but the longer-term cost also needs to be considered.

The objective should be to find a mortgage term that provides sustainable monthly payments while considering the overall cost of borrowing.

Remortgage Fees & Costs

Does remortgaging cost money?

It can.

Depending on the mortgage and lender, costs can include product fees, mortgage advice fees, valuation costs, legal costs and charges associated with your existing mortgage.

Some remortgage products may include incentives that cover certain standard costs.

Do I need a solicitor when remortgaging?

Legal work is normally required when changing mortgage lender because the existing lender's legal charge needs to be replaced with the new lender's charge.

Some remortgage products may include standard legal services as part of the mortgage package.

Will I need to pay a valuation fee?

Not always.

Some lenders provide a standard valuation without a separate charge as part of a remortgage product.

The arrangements depend on the lender and product.

What does Cambs Ely Mortgages charge for arranging a remortgage?

A fee may be payable for arranging your mortgage.

Your adviser will confirm the amount before you choose to proceed.

Our mortgage arrangement fee is usually between £295 and £995, with the precise amount depending on your circumstances and the complexity of the work involved.

Staying With Your Existing Lender

What happens if I don't want to change lender?

You may be able to select another mortgage product from your existing lender.

This is commonly known as a product transfer.

The products available will depend on your lender and circumstances.

Will my existing lender offer me its best rate automatically?

You shouldn't assume that the first option presented is automatically the most appropriate one for you.

The available products, fees and overall costs should be reviewed.

It can also be useful to understand what alternatives may be available elsewhere.

Does a product transfer require a full mortgage application?

Not always.

The process can sometimes be simpler than moving to another lender, particularly if you aren't changing the mortgage balance or other significant features.

However, the exact process depends on the lender and what you're trying to change.

Moving Home Instead of Remortgaging

What if I'm thinking about moving house soon?

Your future plans are important when selecting a new mortgage product.

Entering a long fixed-rate period shortly before moving could potentially result in Early Repayment Charges if the mortgage cannot be transferred as expected.

If you're considering moving, this should form part of the mortgage discussion.

Can I take my existing mortgage with me?

Your mortgage may be portable.

Porting generally means applying to transfer the existing mortgage product to another property.

It isn't automatic. You normally need to satisfy the lender's affordability, credit and property criteria at the time of the move.

Should I remortgage if I plan to move next year?

That depends on your existing mortgage, the products available and your plans.

The flexibility of the new mortgage, Early Repayment Charges and portability can be particularly important when a move may be approaching.

Remortgaging When Self-Employed

Can I remortgage if I've become self-employed?

Potentially.

Becoming self-employed doesn't automatically prevent you from remortgaging, but lenders may assess your income differently from when you were employed.

Your trading history, business structure and evidence of income can all be relevant.

Do I need accounts to remortgage?

If you're self-employed, lenders will normally require evidence of your income.

The documents required depend on your business structure and the lender.

These may include accounts, tax calculations, tax year overviews or other financial information.

Can company directors remortgage?

Yes, subject to lender criteria and affordability.

Different lenders can assess company director income differently, so the way your salary, dividends or other relevant income is treated may vary.

Remortgaging Later in Life

Is there a maximum age for remortgaging?

Lenders have different age and mortgage-term criteria.

Some lenders may consider borrowing into retirement where the proposed income is acceptable and affordability can be demonstrated.

Age alone doesn't determine whether a remortgage is possible.

Can I remortgage after retirement?

Potentially.

The lender will need to understand your retirement income and assess whether the mortgage is affordable.

Different lenders have different approaches to pension income, investment income and maximum ages.

Should I Remortgage?

There isn't a universal answer.

For some homeowners, moving to another lender may provide a suitable option. For others, staying with the existing lender may make more sense.

Sometimes taking no immediate action may also be appropriate depending on the circumstances.

The important point is to compare the relevant options rather than making the decision based only on a headline interest rate.

Interest rates, product fees, Early Repayment Charges, mortgage term, Loan to Value, future plans and overall costs can all influence the decision.

Have More Questions About Remortgaging?

Remortgaging can involve much more than finding a new interest rate.

It can be an opportunity to review how your mortgage is structured, how long you have left to repay it, whether your current lender remains suitable and whether your mortgage still reflects your future plans.

Our Remortgage Guide provides a more detailed explanation of the remortgage process, while our Mortgage & Home Buying Guides explore mortgage rates, terms, fees, overpayments, affordability and other related subjects.

Our Educational Videos also provide straightforward explanations of mortgage and remortgage topics.

Thinking About Reviewing Your Mortgage?

You don't need to wait until your current mortgage deal has already ended before understanding your options.

Reviewing your mortgage in advance can give you time to understand your existing deal, any Early Repayment Charges, your current Loan to Value and the options that may be available when the time comes to make a decision.

Cambs Ely Mortgages is based in Cambridgeshire and helps homeowners in Ely, Cambridge, Cambridgeshire, East Anglia and throughout England through convenient remote appointments.

Building Blocks for a Brighter Future.

#BuildingBlocksForABrighterFuture

Your home may be repossessed if you do not keep up repayments on your mortgage.

Think carefully before securing other debts against your home. Extending the term of your mortgage or consolidating short-term debts into longer-term borrowing may increase the total amount you repay.

Information on this page is for general guidance and does not constitute personalised mortgage, tax, legal or financial advice. Mortgage availability, affordability, rates and eligibility depend on individual circumstances, lender criteria and the products available at the time.