
Re-Mortgages
Remortgaging involves transferring your current mortgage on your existing property to a new one, either with the same or a different lender. This new mortgage then replaces the old one. Whether you're seeking a better deal, nearing the end of your current mortgage term, or looking to borrow money against your property, a remortgage could be the ideal solution for you.
What is a re-mortgage?
A re-mortgage is the process of switching your existing mortgage to a new one on the same property. This new mortgage can be with your current lender or a different one. Essentially, it involves paying off your current mortgage with the proceeds from the new one. Some individuals also choose to re-mortgage in the middle of their mortgage deal in order to switch to a better rate. If you do this, you may be subject to Early Repayment Charges, but we can help you work out whether now is the right time to re-mortgage.
Re-mortgaging can be done for various reasons, such as securing a better interest rate, consolidating debt, or raising additional funds for home improvements or other expenses. It can be a strategic financial move to reduce monthly payments, save on interest over the long term, or access equity built up in the property.
When should I re-mortgage?
Re-mortgaging can be a strategic move to improve your financial situation, but timing is crucial. Here are some factors to consider when deciding if it's the right time to re-mortgage:
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End of Current Mortgage Term: If you're approaching the end of your current mortgage term, it's a good time to consider re-mortgaging to avoid being switched to a higher variable rate.
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Interest Rates: If current interest rates are lower than the rate on your existing mortgage, re-mortgaging could save you money on monthly payments and overall interest.
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Improved Credit Score: If your credit score has improved since you first took out your mortgage, you might qualify for better rates and terms.
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Increase in Property Value: If the value of your property has increased, you might have more equity, which could qualify you for better re-mortgage deals.
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Debt Consolidation: If you have high-interest debt, re-mortgaging to consolidate those debts into a lower interest mortgage can simplify payments and reduce costs.
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Home Improvements: If you need funds for home improvements, re-mortgaging can provide the necessary capital by releasing equity from your property.
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It's important to consider any fees associated with re-mortgaging, such as Early Repayment Charges on your existing mortgage, arrangement fees for the new mortgage, and legal costs.
How much can I borrow on a re-mortgage?
The amount you can borrow on a re-mortgage depends on several factors, including the property value, your financial circumstances, loan-to-value ratio, equity, and affordability. While many individuals re-mortgage to switch to a better deal, it can also be an opportune time to raise additional funds for home improvements or other expenses. Speak to one of our advisers today, who can assist you with your maximum borrowing potential.
How long does it take to re-mortgage?
It's generally advisable to start looking for a new mortgage three to six months before the end of your current term. This way, you can get a clear understanding of the current market and interest rates. The re-mortgaging process typically takes between four to eight weeks, although this can vary depending on several factors. Here’s a general timeline:
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Application: This involves gathering your documents and filling out the mortgage application, which can take a few days to a week.
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Valuation: The lender may need to conduct a property valuation, usually taking about one to two weeks.
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Approval: Once the valuation is done, the lender will review all the information and decide whether to approve the re-mortgage. This can take another one to two weeks.
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Legal Work: Your solicitor or conveyancer will handle the legal aspects, which can take around two to three weeks.
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Completion: Once everything is approved and legal work is complete, your new mortgage will replace the old one. This final step usually takes a few days.
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Overall, while the average time is four to eight weeks, it can be shorter or longer depending on the complexity of the re-mortgage and the efficiency of the parties involved.
How much will it cost to re-mortgage?
Re-mortgage fees are generally quite minimal. Unlike moving house, there are fewer expenses involved, and the majority of the work is handled by us and your lenders. Many lenders offer re-mortgage options with no upfront costs for valuation, legal (conveyancing) fees, or additional application fees.
Do I pay stamp duty on a re-mortgage?
While Stamp Duty is applicable on new home purchases, you don't have to pay it when re-mortgaging. The good news is that if you're simply switching to a new deal or raising money for home improvements, you won't incur any Stamp Duty fees.
This tax is only relevant for purchases of new property or land. So, whether you're re-mortgaging your existing home to secure a better rate or to fund home improvements, you don't need to worry about paying Stamp Duty.
How can Knightwood Mortgages help?
At Knightwood Mortgages, we're dedicated to making your re-mortgage application process as easy as possible. Contact us to find a suitable mortgage deal by emailing services@knightwoodmortgages.co.uk or calling 03301 336045.