Remortgage

What your mortgage reverts to

This is the part that is most often described loosely, including by people who should know better. When a product period ends, what happens next depends on what you signed.

• Most fixed and discounted products revert to the lender's standard variable rate, which the lender sets at its own discretion and can change at any time
• Some products revert instead to a stated follow-on rate, often expressed as a margin over a reference rate rather than the standard variable rate
• Lifetime trackers and term trackers do not revert at all — they run on the same basis for the whole term, so there may be nothing to do and no charge for leaving

So check which of those yours is before assuming you must act. Your mortgage offer says it, and the annual statement usually repeats it. If you cannot find it, send us the paperwork and we will tell you. We have had clients ready to pay to leave a lifetime tracker that was doing exactly what it was supposed to do.

Where the mortgage does revert to a standard variable rate, that rate is typically materially higher than the product you were on, and it moves at the lender's discretion. That is the cost of doing nothing, and it is the reason a letter three months before the end date deserves attention rather than a drawer.

Product transfer or full remortgage

A product transfer means staying with your existing lender and switching onto one of its new products. A full remortgage means a new mortgage with a different lender, repaying the old one. Both are legitimate and we look at both.

The case for a product transfer

It is quicker and lighter. There is usually no valuation, no legal work and often no reassessment of your income, because the lender already holds the loan and you are not borrowing more. If your circumstances have deteriorated — self-employment that is too new to evidence, a period of reduced income, a missed payment — a product transfer can be the only route that works, and its lighter underwriting is precisely the point.

The case for a full remortgage

A wider choice of lender and, often, better pricing than your existing lender is offering its retained customers. It also lets you change the loan itself — a different term, a different repayment basis, additional borrowing, or removing or adding a name.

The honest trade-off

A full remortgage takes longer, involves a valuation and legal work, and re-opens underwriting. That last part is the real cost, because a case that was fine when you took it out is being judged again on today's rules. Our job is to say which route is right for you rather than which one produces the better-looking illustration, and sometimes the answer is that the small saving from moving is not worth the risk of a declined application while you sit on a variable rate.

How far ahead you can secure a new deal

Lenders let you apply and hold a rate for a period before your current product ends. That window varies by lender and it changes, so we will tell you where it stands when you come to us rather than write a number here that will be wrong later.

The useful discipline is to start early enough that you have options. Early application costs you nothing if rates fall, because you can usually switch to a better product with the same lender before completion. Leaving it late costs you the chance to fix anything the underwriting turns up.

On the timing of the switch itself: we will not promise your new rate begins the day the old one ends. If the timetable holds, that is exactly what happens, and it is what we aim for. But offer validity, the valuation and the conveyancing all affect it, and a delay in any of them can leave you on the reversion rate for a period. Starting early is the only real protection against that.

Why a remortgage can be declined when nothing has changed

Clients find this the hardest thing to accept, and it is the reason we would rather look at the case properly than treat a remortgage as an administrative task.

A loan you have paid for years

You can be declined for a mortgage you have paid faultlessly for years. The lender is not asking whether you have paid; it is asking whether it would lend to you today, on today's affordability rules, against today's view of your property.

• Affordability rules and stress assumptions have changed since you last applied, so the same income supports a different loan
• Your income is now assessed differently — self-employed, a new contract, a bonus the new lender discounts more heavily, or a shorter employment history
• New commitments: car finance, a loan, a rising credit card balance, or a dependent
• Something on the credit file, including a payment you did not realise had been missed
• The property: cladding paperwork, a lease that has shortened, construction type, or a valuation that no longer supports the loan against the balance
• Term: you are older than you were, and a term running past a lender's maximum age needs either a shorter term or a lender comfortable with lending into retirement

Where a full remortgage will not work, a product transfer usually still will. That is the fallback we plan for from the start, so nobody ends up stranded on a reversion rate while a second application is attempted.

Raising capital on your home

A remortgage can release money as well as replace a rate — for an extension, a deposit on another property, a tax bill, university costs, a divorce settlement, or a business need. Lenders differ substantially in which purposes they accept and what evidence they want, and some will not lend for certain purposes at all.

Practical points: raising capital re-opens full underwriting even with your existing lender, because you are increasing the borrowing. Expect to evidence the purpose. And where the money is for building work, a further advance is not the same thing as development finance, so tell us the scale of the project before we choose a route.

Debt consolidation

Consolidating unsecured debt into a mortgage often lowers the monthly payment, which is why it is popular, and it is also the change that most deserves a hard look. You are converting unsecured borrowing into borrowing secured on your home, and you are usually spreading it over a much longer period, so the total interest paid can be considerably higher even though each month feels easier. If the underlying spending has not changed, the unsecured balances tend to rebuild alongside the larger mortgage.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

We will still recommend consolidation where it is genuinely the right answer, and we will set out the cost over the full term rather than only the monthly figure so the decision is made with both numbers in view.

Changing the loan while you are at it

A remortgage is the natural moment to change the structure rather than only the rate.

• Shortening the term to reduce total interest, or lengthening it to reduce the monthly payment and accepting the greater cost over time
• Moving from interest only onto repayment, or evidencing a credible repayment strategy where interest only continues
• Adding or removing a borrower, which is a legal change as well as a lending one and needs a solicitor
• Splitting the loan into parts, for example fixing most of it and leaving a portion flexible for overpayment
• Checking the overpayment allowance on the new product, which matters more than most people realise if you expect a bonus or a lump sum

What we charge

Our fee is typically £495, though complexity moves it, and it is always disclosed in writing before you apply. Each stage of the fee is earned when that stage is reached and is not refundable after that point. Separately, you have the right to cancel within 14 days, as set out in our Terms of Business. We are usually also paid a procuration fee by the lender.