Remortgaging is a popular way to avoid paying costly Standard Variable Rates (SVR), lower your monthly repayments or release equity from the property. But it can feel overwhelming! A whopping four in ten people find the process stressful, according to 2018 research by Trussle.

Part of the reason for this stress is that everyone’s situation is different. While some people will be grappling with government-backed Help to Buy remortgaging, others may be figuring out how to release equity for new property investments.

To help you get to grips with remortgaging and kick any stress to the kerb, we’ve laid out the process.

1. Decide what kind of remortgage deal you want

Before you begin the journey, it’s best to know the destination! Think carefully about what you want to get out of your remortgage. Here are some questions to consider:

• Do you want to release equity?
• Would you like to pay off more of the mortgage?
• Do you want to lower your monthly payments?
• Are you happy with your existing provider?
• Are you looking for a new one?
• How long do you want the mortgage for?

Once you know exactly what you’re looking for, it’s time to see what’s out there!

2. Figure out how much you could borrow

There are plenty of mortgage calculators available online to give you an idea. Try heading to the websites of different mortgage providers to see how much you could borrow and what your monthly repayments would be.

3. Compare deals online, including extra fees

Check out the different deals available online with unbiased comparison sites. But beware of the tricks!

Some mortgage providers get to the top of the comparison tables by offering cheaper rates but cunningly charge an upfront fee. This fee is usually how they make back their profit, so be sure to factor this into any calculations.

For example, if you’re searching for a three-year remortgage deal and there is an upfront fee of £3,600, that’s the equivalent of an extra £100 each month. Some lenders will charge application fees, valuation fees and solicitor’s fees too. It pays to keep a close eye on these extra costs!

Note that some deals will only be available to borrowers directly, and not mortgage brokers.

4. Get organised with your finances and documents

Just because it’s not the first time around, it doesn’t mean that the remortgage process will be any easier! Getting organised while time is still on your side can save a lot of stress and hassle later.

Try to ensure that your bills are all promptly paid and that your information is consistent. This could help to boost your credit score and improve your chances of getting accepted.

Also, be wary of changing jobs or going self-employed within the last three-to-six months of your current mortgage agreement. To get accepted for a loan, it’s generally better to show a stable and consistent source of income.

5. Start your application either directly or through a broker

Once you’ve found your deal, it’s time to apply. This part is much the same as the first time around, you can do this in person at a bank or online.

In some cases, it can be helpful to employ a professional mortgage broker to find the best deal on your behalf. This is especially true for more complex situations, for example, if you are new to the UK, have an unusual mortgage requirement or are self-employed for less than three years.

Remortgaging can take around six-to-eight weeks, so experts recommend starting the process at least three months before your current agreement expires. Ideally, six months to be safe.

6. Obtain your remortgage agreement in two stages

If your application is accepted, the new contract will come in two stages. Firstly, an “agreement in principle”. This is a statement from the lender to say that, in theory, they will offer you the mortgage. This is not a guarantee.

To get the remortgage contract, you’ll need to complete the application process. As you go through the remortgaging journey expect to provide your financial documents, speak to lawyers, undergo credit checks, and welcome surveyors into your home. The process will take several weeks, so be sure to stay on top of it and be patient.

7. Completing your remortgage

After six-to-eight weeks, your remortgage agreement should hopefully be signed and ready to go.

There are a series of legal steps involved as you complete your remortgage. These will usually be done by solicitors or conveyancers and often the mortgage provider will recommend lawyers to you.  

For the most part, these steps are:

• A completion statement will be prepared
• The agreement needs to be registered with the land registry
• The title deeds may need to go to the new lender

8. Cancel your existing direct debits

Your current mortgage provider should be informed of the change during the process. If in doubt, be sure to ask your new provider or mortgage broker!

One of the last steps you’ll need to do is to cancel your existing direct debits so that you don’t pay double. And set up monthly repayments to your new provider.

Depending on the terms of your mortgage, you may need to pay an early cancellation fee. Generally, the closer your contract is to expiring, the cheaper it will be.

While the process may seem daunting, it’s well worth the effort. The Financial Conduct Authority found that in 2021, homeowners who failed to remortgage were paying an average of £2,300 extra each year! For more expensive properties (such as those in the capital, for example), this rose to a shocking £4,400! Another study found that 800,000 people in the UK could add seven weeks’ worth of salary to their savings if they remortgaged today.

Making the most of your hard-earned income is vital for effective financial planning. Once you have a robust mortgage plan, it should pave the way for better savings and peace of mind.

Please remember that while this article is intended to be helpful, it is not advice. To get the best recommendations for you, talk to a personal financial advisor.

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