When to Remortgage

Whether you want to cut your monthly payments, borrow more money or your personal circumstances have changed, there are many reasons you may be considering remortgaging your home.

 

Our remortgage guide covers every aspect of remortgaging: from how much you can remortgage your house for to what to do when your remortgage application is rejected.

What is a remortgage

A remortgage is the process of switching your existing mortgage on your home to a different scheme, either with your current lender or a new lender. In simple terms, the new mortgage is used to pay off the existing mortgage, using the same property as security against the loan.

When to remortgage

In many cases, a remortgage is simply about changing to a mortgage that is more suitable for your current circumstances. But, how do you know when it’s the right time to remortgage your home?

There is no hard and fast rule when it comes to remortgaging, as the decision will always depend on lots of different factors. However, it’s especially worth thinking about remortgaging if you’re nearing the end of a fixed deal or if you’re on your lender’s standard variable rate as your lender’s standard variable rate is likely to be higher than other interest rates.

Other reasons you may want to consider remortgaging your home:

  • You want to borrow more

If your current lender has said no to lending you extra money, remortgaging to a new lender might allow you to raise money, perhaps even on a lower rate than your current deal.

  • You want to overpay and your current lender won’t let you

If your financial situation has changed and you want to pay extra on your monthly repayments, but your existing deal won’t let you, a remortgage will allow you to reduce the loan size and potentially get a cheaper rate as a result.

  • Your home’s value has increased by a significant amount

If the value of your property has increased rapidly, you may find you’re in a lower loan-to-value band and eligible for lower rates.

  • You want to switch from repayment to interest-only

In most cases, making the switch shouldn’t require remortgaging, your lender should be able to make the change for you. However, if you want to change from capital repayment to interest only this can be difficult.

Alternatively, there are many circumstances where remortgaging your home may not be the best option. For example, if your mortgage debt is small, you have little equity or you’ve had credit problems since taking out your last mortgage.

If you’re unsure whether to remortgage your home or not, why not pop into your nearest Newcastle Building Society branch to speak with a member of our team?

Tips for remortgaging

Some important considerations to make ahead of remortgaging your home are:

  • Understand what you want from your new mortgage deal
  • Ensure you have sufficient equity in your home
  • Find out how much you owe your current lender
  • Check the terms and conditions of your current mortgage to find out whether there is an early repayment charge
  • Make sure your budget accommodates for legal, valuation and administration costs
  • Check if your current provider can offer you the mortgage you require as there may be cost benefits in staying with your current provider instead of moving.

How much can I remortgage my house for?

You can get a rough idea of how much you can borrow using our mortgage affordability calculator. However, this should only be regarded as an estimate.

What to do when remortgage application is rejected

When you choose to remortgage your home, your lender will assess your application using set affordability criteria, including a full credit check. There may be other eligibility requirements depending in the type of mortgage applied for.

The purpose of this process is for the lender to determine how likely you are to meet repayments.

Occasionally, lenders can reject mortgage applications. This may be because you have missed payments or made late payments recently, you have made too many credit applications, you’re not registered to vote on the electoral role, the lender has calculated you won’t be able to make repayments based on your affordability assessment, or a number of other reasons.

If you have been declined a remortgage, you will be informed by your lender as to why. At this point, you should address the reasons why you were refused.

Should I pay off my mortgage early?

If you're remortgaging with a desire to pay off your mortgage early in mind, you may want to view our should I pay off my mortgage early guide as the answer to that quesiton may not be as straightforward as you think.

FAQs

Do i need a deposit to remortgage?

No, you do not need a deposit to remortgage however you must have sufficient equity in your home. 

Equity is the percentage of your home you already own.

How much does it cost to remortgage?

There are a number of fees and charges you may need to budget for depending on the type of mortgage you take and your personal situation. The types of fees include; 

  • Valuation fee
  • Reservation fee
  • Arrangement / completion fee
  • Legal fees

You should also check the terms and conditions of your current mortgage to find out whether there is an early repayment charge or / as well as an exit fee.

Before making a final decision, obtain a full mortgage redemption cost from your current lender and carefully check your new mortgage illustration, which will include the details of any costs involved.

Do you need a solicitor when remortgaging?

If you are switching lenders, you will require a solicitor or conveyancer to help with the legal side of things. Moving to a new rate or deal with your current lender is known as a product transfer and doesn’t require additional legal work.

If you choose to remortgage with Newcastle Building Society, you can benefit from our solicitor services. With us, you can enjoy no standard legal costs. Read our conveyancing services page to find out more.

What documents do I need to remortgage?

If you are remortgaging with a new lender, the documents you need to provide will be similar to when you applied for your first mortgage.

You will usually need to provide the following paperwork:

  • Details of the property
  • Details of your bank account
  • Proof of identity, such as a passport or driving licence
  • Proof of address, such as a council tax or utility bill
  • Proof of employment
  • Proof of your financial situation
  • Proof of your income, such as pay slips, P60, or your accounts if you are self-employed
  • Proof of your outgoings, such as bank statements, and including debts and loans
  • Proof of your assets, such as investments, other properties, or accounts

If you’re still unsure about the buying and selling process, why not pop into a Newcastle Building Society branch today?

Whether you’re a new customer or an existing customer, our qualified team of mortgage advisors are always on hand to help and answer any questions you may have. Book an appointment in branch today.

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

Thinking about remortgaging?

You can speak to one of our friendly mortgage advisers by calling

443456064488

8am - 8pm Monday to Friday 9am - 3pm Saturday (Calls to 03 numbers, cost the same as a call to a standard ‘01’ or ‘02’ landline number, even when calling from a mobile.)