When Should You Remortgage? A Complete Guide

You should remortgage when it saves you more money than it costs — typically every 2–5 years when your current deal ends. But most homeowners miss thousands in savings by not comparing options properly. This complete guide walks you through when to remortgage, how to compare deals so you actually save money, and the mistakes that trap people into overpaying by £100–£300 every month.

When Should You Remortgage?

Start looking 4–6 weeks before your current fixed deal ends. That's early enough to compare options but late enough that rate quotes are live (they're usually valid for 21 days). Your lender will send you an offer, but don't accept it without checking at least 5 others. The difference between the best and worst deals is often £150–£300 per month.

Most mortgages end on a fixed date — usually 2, 3, or 5 years from signing. When the fix expires, your lender automatically rolls you onto their Standard Variable Rate (SVR). This is expensive. SVR is typically 2–3% higher than new fixed-rate deals, so staying put costs significantly more. Never let yourself drift onto the SVR — it's the lender's way of relying on your inertia.

You should also remortgage if:

Rates have fallen significantly. If base rates have dropped since you fixed, a new deal could cost less even after paying fees. Calculate whether 2–3 years of savings exceed the total remortgage cost (see below).
You want to borrow more. A remortgage replaces your entire mortgage, so you can release equity for an extension, renovation, or debt consolidation at the same time.
You're switching rate types. Moving from interest-only to repayment, or from variable to fixed, can save thousands over time.
Your loan-to-value has improved. If you've paid down your mortgage, your LTV is lower, which unlocks better rates. Every 5–10% reduction in LTV typically drops rates by 0.3–0.5%.

How Remortgage Works: The Numbers That Matter

When you remortgage, you're paying off your old mortgage with a new one from a (possibly different) lender. The new lender re-assesses your property, re-checks your credit, and quotes you a new deal based on your circumstances.

Loan-to-value (LTV) is the biggest factor in the rate you'll get. LTV = (mortgage amount ÷ property value) × 100. On a £250,000 property with a £150,000 mortgage, you're at 60% LTV. With a £225,000 mortgage, you're at 90%. A 60% LTV gets rates 0.5–1% lower than a 90% LTV — on a £200,000 mortgage, that's £80–160 less per month. This matters hugely if you've paid down your mortgage since you first bought; understanding how much deposit you need helps you see where you sit on this spectrum.

Fixed vs variable rates is certainty versus risk. A fixed-rate mortgage locks in your payment for 2–5 years, protecting you from interest rate rises but charging a premium (usually 0.5–1.5% above tracker rates). Variable rates (tracker or SVR) move with Bank of England base rate changes — cheaper when rates fall, more expensive when they rise. Most people choose fixed because they want certainty in their budget.

Repayment vs interest-only determines whether you own the house at the end. A £200,000 repayment mortgage over 25 years at 4.5% costs about £1,111/month and the mortgage is gone when the term ends. Interest-only costs £750/month, but you still owe £200,000 when it matures. Most people remortgage on repayment terms unless they have a specific strategy to pay off the capital another way. Learn the trade-offs in our breakdown of interest-only vs repayment mortgages.

Use our mortgage calculator to plug in your actual numbers and see how each variable affects your monthly payment and total interest paid.

The Hidden Costs: What Makes Remortgage Expensive

Most people focus on the interest rate, but remortgaging involves several costs that add up to £2,000–£4,000:

Arrangement fees (£500–£2,000) — charged by the lender to set up the mortgage. Some lenders offer "free" mortgages with no arrangement fee but charge 0.2–0.3% higher rates to compensate.
Valuation or survey (£250–£600) — the lender requires a property valuation. A basic valuation is cheapest; a homebuyer report costs more but can save you from expensive surprises.
Solicitor or conveyancer fees (£800–£1,500 plus disbursements) — for the legal work. Get quotes from at least 3 firms; prices vary significantly.
Land Registry and search fees (£100–£300) — included in conveyancer costs.
Early repayment charges (ERCs) — if your current deal has an ERC and you remortgage before it ends, you'll pay a penalty. These are typically 1–5% of the outstanding balance. On a £200,000 mortgage, that's £2,000–£10,000 and can wipe out your savings entirely. Always check whether an ERC applies before committing to a remortgage.

Our remortgage calculator factors in these costs so you see the true picture. Never compare deals based on interest rate alone.

Comparing Deals: The Total Cost Approach

This is where people go wrong. They compare headline rates instead of total cost, which leads to overpaying by hundreds of pounds.

Example: Deal A is 3.9% with a £999 arrangement fee. Deal B is 4.1% with no fee. On a £180,000 mortgage over 2 years, which is cheaper?

Deal A: (£180,000 × 0.039) × 2 + £999 = £15,039
Deal B: (£180,000 × 0.041) × 2 = £14,760

Deal B saves you £279 despite a 0.2% higher rate. Always compare total interest plus all fees.

Also check early repayment charges carefully. Some lenders have sliding-scale ERCs (5% in year 1, dropping to 1% in year 5); others charge flat rates. If you expect to move in 3 years and your ERC is 2% on a £200,000 mortgage, that's £4,000 to budget. Compare this against remortgage savings over the same 3 years.

Understanding mortgage APR versus interest rate shows how lenders calculate true annual cost including fees — but always verify the math yourself before committing.

Common Mistakes That Cost Hundreds Per Month

Not shopping around. Lenders know most people don't compare. The difference between the best and worst rates on the market is 0.5–1%, which translates to £80–160 per month on a £200,000 mortgage. Use a whole-of-market broker or compare at least 5 lenders directly. It takes an hour and can save thousands.

Staying on the SVR out of inertia. When your fixed deal ends, your lender automatically moves you onto their Standard Variable Rate. This is almost always more expensive than a new fixed deal. The FCA's mortgage conduct rules ensure you're given notice, but that doesn't mean you should take the default. Check every 6–12 months whether you're on a competitive rate.

Ignoring the total cost of remortgaging. A rate that looks good in isolation can be expensive once you factor in fees. If remortgage costs £2,500 and saves you £80/month, you need 31 months of savings to break even. On a 5-year fix, that's fine; on a 2-year fix, it's tight and might not be worth doing.

Stretching to the maximum mortgage. Just because a lender will offer you 4.5x your salary doesn't mean you should borrow it. Stress-test your budget: if rates rise 2%, can you still afford the payment? If you earn £40,000 and borrow £180,000 at 5.5% over 25 years, your payment is £1,084/month. If rates rise to 7.5%, that jumps to £1,327 — a 22% increase. Plan for this scenario.

Not planning for the next deal. When you remortgage, you're choosing a new 2–5 year term. Start looking at options 4–6 weeks before it ends — don't get caught on the SVR because you forgot.

Frequently Asked Questions

Q: When is the best time to remortgage? A: Start looking 4–6 weeks before your current deal ends. If rates have fallen significantly mid-deal, you might remortgage early — but only if the savings exceed the cost of early repayment charges plus remortgage fees. Use our mortgage calculator to compare the scenarios.

Q: Can I remortgage with bad credit? A: It depends on how bad. Recent missed payments or defaults will make most lenders decline you. If you have an older default (5+ years ago) or a lower credit score, some specialist lenders will consider you, but at higher rates. Check what happens when your mortgage deal ends if you're stuck on an SVR and struggling to remortgage.

Q: How much will remortgage cost? A: Typical costs are: arrangement fees (£500–£2,000), valuation (£250–£600), solicitor (£800–£1,500), Land Registry and searches (£100–£300). Total: £1,650–£4,400. Some lenders offer no-arrangement-fee deals at higher interest rates. Our mortgage fees guide breaks down each cost in detail.

Q: What if I have an early repayment charge? A: Check your mortgage offer for the ERC amount (typically 1–5% of outstanding balance). Calculate the cost and compare it against remortgage savings. If the ERC is £4,000 and remortgage saves £100/month, you need 40 months to break even. On a 5-year fix, that works; on a 2-year fix, you might stay put.

Q: How much can I borrow when remortgaging? A: You can borrow up to the equity in your home (property value minus current mortgage). Most lenders lend up to 80% LTV by default; some go to 90–95% at higher rates. Use our mortgage calculator to see what different borrowing amounts cost monthly.

Q: Will remortgaging affect my credit score? A: A remortgage involves a "hard" credit check, which temporarily lowers your score by 5–10 points. The impact is small and recovers within a few months, especially if you apply to only 3–5 lenders within a two-week window. Multiple applications in a short time count as a single search.

Q: Should I remortgage to a shorter or longer term? A: Shorter terms (10–15 years) have lower rates but higher monthly payments. Longer terms (30–40 years) have higher rates but lower payments. Remortgage to the shortest term you can afford comfortably, then stress-test it at 2% higher rates. The difference in monthly payment between a 25-year and 30-year term is only £80–100 on a £200,000 mortgage, but you pay interest for 5 extra years.

Q: Is it worth remortgaging to release equity? A: Only if the purpose is debt consolidation (paying off expensive credit card debt at 20% becomes mortgage debt at 5% — the savings exceed the cost) or a home improvement that increases property value. Don't release equity for consumption — holidays, cars, lifestyle — because you'll pay interest on it for 25 years.

Next Steps

Start by understanding your current deal: write down the monthly payment, interest rate, remaining term, and any early repayment charges. Then use our mortgage calculator to run scenarios with different rates, terms, and LTVs. Compare a 2-year fix, a 5-year fix, and a 10-year fix side by side.

Include all fees (arrangement, valuation, solicitor, searches) in your comparison. Don't forget early repayment charges if they apply. Run the numbers for two scenarios: rates staying flat, and rates rising 1%. If remortgage wins in both, it's probably worth doing.

Start shopping 4–6 weeks before your current deal ends, compare at least 5 lenders, and don't accept the first offer your current lender sends you.