Remortgage: When to Switch, How It Works and What It Costs

By Jake Stott, Knox Mortgages. Reviewed by an adviser authorised under Fort Advice Bureau, FCA FRN 972730. Published 28 May 2020. Last reviewed 27 September 2026.

A remortgage is when you replace your existing mortgage with a new one on the same property, either with a new lender or with your current lender on fresh terms, without moving home. Most people remortgage when a fixed or tracker deal ends, to avoid rolling onto the lender’s standard variable rate, to borrow more against the equity they have built, or to change the term or the names on the mortgage.

That is the definition. The practical question is when to act, whether to switch lender or stay put, and what it will cost you. This guide answers all three with real numbers, then covers the situations that make a remortgage harder: self-employment, lower income, missed payments, visas and equity release. Start roughly six months before your deal ends. That single habit saves more money than any rate hunting you do later.

What does remortgaging actually involve?

Remortgaging means a new lender (or your existing one) lends you enough to repay your current mortgage in full, and a new mortgage is registered against your home. With a full remortgage to a new lender, the process looks like a smaller version of a purchase: an application, a credit search, affordability checks, a valuation and a legal stage where a conveyancer repays the old lender and registers the new charge at HM Land Registry. You do not move out, no estate agent is involved and there is no stamp duty on a straight remortgage.

The alternative is a product transfer, where you stay with your current lender and simply pick a new rate. There is no new lender, usually no valuation and no legal work, and if you are not borrowing more most lenders do not reassess affordability in full. Which route is right depends on the rates on offer, your circumstances and whether you want to raise money. We compare the two in detail below and in our guide to product transfer vs remortgage.

When should I start my remortgage?

Start around six months before your current deal ends. Most remortgage offers are valid for three to six months, so a lender can issue an offer now and you complete on the day your fixed rate expires, with no gap on the standard variable rate and no early repayment charge.

Starting early costs nothing and gives you a free option. If rates fall between application and completion, a good broker can usually move you to a cheaper product with the same lender, or apply elsewhere, before you complete. If rates rise, you are protected by the offer you already hold. Lenders signed up to the Mortgage Charter (agreed by the government, the FCA and major lenders in June 2023) also let existing customers lock in a product transfer up to six months ahead and request a better like-for-like deal if one appears before the new deal starts.

Leave it to the last month and three things go wrong. Your valuation, underwriting or legal work can slip past your deal end date. You lose the ability to pick the best of several months’ pricing. And you may be pushed into a product transfer simply because there is no time left to switch lenders, even when a better rate exists elsewhere.

Months before your deal ends	What to do
6 months	Check your end date and early repayment charge. Pull your credit file. Book a review call.
5 to 4 months	Compare product transfer with the whole market. Apply for the best remortgage and secure an offer.
3 to 2 months	Valuation and underwriting complete. Legal work starts. Keep watching rates for a cheaper switch.
1 month	Conveyancer confirms redemption figure. Completion date set to match your deal end.
Deal end date	New mortgage starts. No SVR, no early repayment charge.

For what happens on the day your deal lapses, read what happens when your fixed rate ends.

Is a product transfer or a remortgage better?

A product transfer is better when your current lender’s rate is within a small margin of the best deal elsewhere, or when your circumstances have got worse since you last applied. A full remortgage is better when another lender is materially cheaper, when you want to borrow more, or when you need features your current lender will not offer.

The most common mistake we see is taking the product transfer letter that lands on the doormat without comparing it. Lenders know that a large share of borrowers never shop around, and retention pricing is not always their sharpest. On the other hand, a product transfer is often the smartest move for someone whose income has dropped, who has become self-employed, or who has had missed payments since their last application, because most lenders will not put an existing customer through a full affordability assessment to switch rate on the same balance.

Factor	Product transfer	Full remortgage
Lender	Stays the same	Usually a new lender
Rate choice	Your lender’s retention range only	Whole of market
Affordability check	Usually none if not borrowing more	Full income and credit assessment
Credit search	Usually none	Yes
Valuation	Usually none	Yes, often free on remortgage products
Legal work	None	Yes, often free legals included
Typical time	Days to 2 weeks	4 to 8 weeks
Borrow more	Possible, but assessed as a further advance	Yes, subject to criteria
Best for	Changed circumstances, small rate gap	Bigger savings, raising funds, restructuring

How much does doing nothing cost on the standard variable rate?

Doing nothing usually costs hundreds of pounds a month. When a fixed or tracker deal ends, the mortgage rolls onto the lender’s standard variable rate (SVR). Average SVRs sat at roughly 7.1% to 7.3% in August and September 2026 according to Moneyfacts and Uswitch data, while Bank Rate was held at 3.75% on 16 September 2026. SVRs are set by the lender, not tied to Bank Rate, and are almost always well above the rates available on a new deal.

Worked example: £200,000 balance, 20 years left

Take a borrower with £200,000 outstanding on a repayment mortgage and 20 years remaining. Their five-year fix has ended.

• On an SVR of 7.25%: monthly rate 7.25% ÷ 12 = 0.6042%. Over 240 months the repayment works out at £1,580.75 a month.
• On an illustrative new two-year fix at 5.00%: monthly rate 0.4167% over 240 months gives £1,319.91 a month.
• Difference: £1,580.75 less £1,319.91 = £260.84 a month.
• Over 12 months: £260.84 × 12 = £3,130.08.
• Even after a £999 product fee, the switch saves £3,130.08 less £999 = £2,131.08 in the first year.

Three months on the SVR while you “get round to it” costs £260.84 × 3 = £782.52 in this example. The rates are illustrative, not a quote; your own figures depend on your loan to value, credit profile and the market on the day. The arithmetic principle does not change: a remortgage started late is money handed to your lender.

Will I pay an early repayment charge if I remortgage?

You will pay an early repayment charge (ERC) if you leave a fixed, tracker or discount deal before its product period ends, unless the product is ERC-free. ERCs are usually a percentage of the balance repaid, commonly stepping down each year, for example 5%, 4%, 3%, 2% and 1% across a five-year fix. Your mortgage offer and annual statement show the exact schedule.

Paying an ERC to switch early only makes sense when the saving is bigger than the charge. Most of the time it is not.

Worked example: is it worth breaking a fix?

A borrower owes £180,000 over 18 years at 5.90% with 14 months left on the deal. The ERC is 3%, so £180,000 × 3% = £5,400. A new rate of 4.60% would cut the monthly payment from £1,354.59 to £1,226.92, a saving of £127.67 a month. Over the 14 months left on the old deal, that is £127.67 × 14 = £1,787.38. Paying £5,400 to save £1,787.38 loses £3,612.62. The right move is to secure an offer six months before the deal ends and switch penalty-free.

Exceptions exist: some products allow 10% overpayments a year without charge, some are portable, and a few borrowers break a fix to release equity for something time-sensitive. Our full guide to the early repayment charge on a mortgage explains how the charge is calculated and when it is worth paying.

Can I remortgage to release equity?

Yes. Remortgaging to release equity means borrowing more than you currently owe and taking the difference as cash. Equity is the gap between your home’s value and your mortgage balance, and lenders will usually let you borrow against it up to a maximum loan to value (LTV) that depends on what the money is for.

Lenders care about the purpose. Home improvements are the most widely accepted reason, often up to 85% or 90% LTV. Debt consolidation is accepted by many lenders but often at tighter LTV caps and with closer scrutiny of how the debt built up. Other purposes lenders commonly accept, subject to individual criteria, include buying out an ex-partner, gifting a deposit to a family member, buying a second home or buy-to-let property, and paying a tax bill. Business purposes and investments such as shares are accepted by fewer lenders. Gambling or unexplained cash withdrawals will be declined.

Purpose of the extra borrowing	How lenders typically view it	What they usually want to see
Home improvements	Widely accepted, highest LTVs	Outline of the works and rough costs
Debt consolidation	Accepted by many, often lower LTV caps	Statements for each debt; the debts cleared on completion
Buying out a partner	Widely accepted	Separation agreement or court order, transfer of equity
Gifted deposit for family	Accepted by many	Recipient’s details and the purchase they are making
Buy-to-let or second home deposit	Accepted by some	Details of the purchase and how it will be funded
Business use	Accepted by fewer lenders	Business plan, accounts, clear use of funds

Worked example: releasing £40,000 for an extension

Your home is worth £350,000 and you owe £180,000, so your LTV is £180,000 ÷ £350,000 = 51.4%. Borrowing an extra £40,000 takes the new loan to £220,000, and £220,000 ÷ £350,000 = 62.9% LTV. That still sits under the 65% band where many lenders price their better rates, so the extra borrowing does not push you into a worse pricing tier. Borrow £50,000 instead and the loan becomes £230,000, or 65.7% LTV, which can tip you into the next band and a higher rate on the whole balance. Checking where the LTV bands fall before you settle on the figure is basic, and most people are never told to do it.

Read more in our guide to remortgaging to release equity. Consolidating short-term debt into a mortgage can lower the monthly cost but increase the total interest paid over a longer term, so it needs careful advice.

Can I remortgage if my circumstances have changed?

Usually, yes, but the route matters more than it did when you bought. If your income, employment or credit has changed for the worse, a product transfer with your current lender is often the safest route because most lenders do not reassess affordability when you switch rate without borrowing more. If you need a new lender, you need one whose criteria fit your new situation.

Self-employed since your last mortgage

Most lenders want to see two years of accounts or SA302 tax calculations with matching tax year overviews, and some accept one year. Company directors can be assessed on salary plus dividends, or with some lenders on salary plus their share of net profit, which can make a big difference when profit has been retained in the business. Our self-employed remortgage guide covers the options.

Lower income than before

If your income has fallen, a new lender may offer less than your current balance. A product transfer avoids that problem. If you do need to switch lender, extending the term, choosing a longer fix (lenders stress test five-year fixes differently from two-year deals) or adding a second applicant can restore affordability.

Missed payments or adverse credit

Recent missed payments, defaults or CCJs narrow the high street options but do not end them. Many lenders look closely at the last 12 to 24 months, and specialist lenders accept more recent issues at higher rates. See getting a mortgage with missed payments.

On benefits or Universal Credit

Some lenders count certain benefits as income and some do not. If you receive Universal Credit, read our guide on Universal Credit with a mortgage, including how Support for Mortgage Interest works.

On a visa

Remortgaging on a visa is possible with many lenders. Criteria vary on how much time must be left on the visa and how long you have lived in the UK. If you now hold Indefinite Leave to Remain, most lenders will assess you in the same way as a UK national, which can open up cheaper rates than you had when you bought.

How long does a remortgage take, step by step?

A full remortgage typically takes 4 to 8 weeks from application to completion, and a product transfer can complete in days. The legal stage is usually the longest part, which is why starting six months ahead matters.

Step	What happens	Typical time
1. Review	Check deal end date, ERC, balance, estimated value and LTV	1 day
2. Research and advice	Whole-of-market comparison against your lender’s product transfer	1 to 3 days
3. Decision in principle	Soft or hard credit search depending on the lender	Same day to 2 days
4. Full application	Payslips or accounts, bank statements, ID submitted	1 to 3 days
5. Valuation	Automated, desktop or physical valuation	2 days to 2 weeks
6. Underwriting and offer	Lender verifies income and issues the mortgage offer	1 to 3 weeks
7. Legal work	Title checks, redemption statement, searches if required	2 to 4 weeks
8. Completion	New lender pays off old lender; new charge registered	On the agreed date

Delays usually come from missing documents, a down valuation, leasehold issues (short leases, service charge queries) or a redemption statement that arrives late. Answer your broker’s and conveyancer’s questions the same day and most remortgages finish comfortably inside the window.

What happens with the valuation and legal work?

Most remortgage products include a free standard valuation, and many include free legal work through a panel conveyancer chosen by the lender. Some offer cashback instead of free legals, which can be worth more if you have a conveyancer you prefer or if the free legals service is slow.

The valuation is often automated or desktop-based on a straightforward property, which is quick. A physical valuation is more likely on a non-standard property, a high LTV case or when equity is being released. If the valuation comes in lower than expected, your LTV rises and the rate can change, so it pays to estimate the value conservatively before choosing a product.

Free legals cover the standard remortgage work only. Extras such as a transfer of equity (adding or removing a name), a lease extension, or sorting a title defect are normally charged separately. If you are removing a partner as part of a separation, read our guide on getting a mortgage after divorce.

What does a remortgage cost?

The main costs of a remortgage are the lender’s product fee, any early repayment charge, a valuation fee if the product does not include a free one, legal fees if you are not using free legals, and your old lender’s exit fee. Budget for these before you compare rates, because a low rate with a large fee can cost more overall than a slightly higher rate with no fee.

Cost	Typical range	Notes
Lender product or arrangement fee	£0 to £1,999, or a percentage of the loan	Can usually be added to the loan, but you then pay interest on it
Valuation fee	Often free; otherwise from around £250	Higher for larger or unusual properties
Legal fees	Often free; otherwise from around £300 plus VAT and disbursements	Extra for transfer of equity or leasehold work
Exit or deeds release fee	Around £0 to £300	Charged by your old lender; shown on your original offer
Early repayment charge	Commonly 1% to 5% of the balance	Only if you leave before the deal ends
Stamp duty	None on a straight remortgage	Can apply to a transfer of equity for money above the threshold

A quick rule for comparing fee against rate: divide the fee by the monthly saving it buys. If a £999 fee cuts your payment by £40 a month, it takes 25 months to pay back, which is fine on a five-year fix but a loss on a two-year fix. On smaller loans, fee-free products often win.

Should I fix, track or go longer on my remortgage?

It depends on how much payment certainty you need and how long you expect to keep the mortgage. A fixed rate gives certain payments, a tracker follows Bank Rate up and down, and a longer fix reduces how often you face remortgage costs and risk. In September 2026 the Monetary Policy Committee held Bank Rate at 3.75% on a 6 to 3 vote, with three members voting for an increase, and Moneyfacts reported average two-year and five-year fixed rates rising to 5.73% and 5.78% by 15 September 2026. When the direction of travel is uncertain, the value of certainty goes up.

Compare the options in should I fix my mortgage, fixed rate mortgages, tracker mortgages and long-term fixed rate mortgages. If you are moving home rather than staying put, porting your mortgage may avoid an ERC altogether.

Why do remortgage applications get declined, and how do you fix it?

Remortgages are declined for the same reasons purchases are: affordability, credit, the property, or the valuation. The difference is that a declined remortgage can leave you on the SVR while you start again, so it pays to catch these issues before you apply.

Reason for decline	The fix
Income fallen since the last mortgage	Product transfer with your current lender, longer term, or a lender with a more generous income model
New credit card or car finance pushing affordability	Clear or reduce balances before applying; declare everything so the lender does not find it later
Recent missed payments or defaults	Choose a lender whose adverse credit criteria fit the age and size of the issue
Down valuation raises the LTV	Reduce the loan, pick a product in the higher LTV band, or request a valuation review with comparables
Not on the electoral roll	Register at your current address before the credit search
Term runs past retirement age	Evidence pension income, or choose a lender that lends into later life
Short lease or cladding issues	Lease extension, EWS1 form, or a lender with specialist property criteria
Self-employed income dropped in the latest year	A lender that averages two years, or one that uses salary plus retained profit

Illustrative Knox case

A couple in Greater Manchester (anonymised, figures rounded) had a five-year fix ending in four months. Since buying, one of them had moved from employment to running a limited company, and their current lender’s product transfer rate was 0.6% above the best rate available elsewhere. A high street lender’s affordability model, using salary and dividends only, left them £25,000 short of the balance. We placed the case with a lender that assessed salary plus share of net profit, which covered the full loan with room to spare, and secured the offer three months before the deal ended. They completed on the day the fix expired, never touched the SVR, and saved the difference between the two rates for the next five years.

Remortgaging a buy-to-let or recently bought property?

Buy-to-let remortgages are assessed on rental income against an interest coverage ratio rather than your personal income, and portfolio landlords with four or more mortgaged properties face extra underwriting. See buy-to-let remortgage. If you bought with cash or bridging finance within the last six months and want to refinance straight away, most lenders will make you wait, but some will not; our day one remortgage guide explains which situations qualify.

Remortgage FAQs

How early can I remortgage before my deal ends?

You can usually apply around six months before your deal ends. Most remortgage offers are valid for three to six months, so you can secure a rate now and complete on your deal end date without an early repayment charge. Some lenders’ offers are shorter, so the exact window depends on the lender you choose.

Do I need a solicitor to remortgage?

Yes for a full remortgage to a new lender, because a conveyancer has to repay your old lender and register the new charge. Many remortgage products include free legal work through a panel conveyancer. A product transfer with your existing lender needs no solicitor at all.

How long does a remortgage take?

A full remortgage typically takes 4 to 8 weeks from application to completion. A product transfer with your current lender can complete in a few days. Down valuations, leasehold questions and missing documents are the most common causes of delay.

Is it better to remortgage or do a product transfer?

It depends on the rate gap and your circumstances. A product transfer is simpler and usually avoids a new affordability check, which suits anyone whose income has dropped. A remortgage opens up the whole market and is better when another lender is noticeably cheaper or you want to borrow more.

Can I remortgage with bad credit?

Yes, in many cases. The options depend on how recent and how serious the issue is. Recent missed payments, defaults or CCJs narrow the choice, but specialist lenders accept many situations at higher rates. A product transfer with your existing lender is often available regardless of your credit file.

How much equity can I release when I remortgage?

It depends on your property value, affordability and what the money is for. Lenders commonly allow borrowing up to 85% or 90% of the property value for home improvements, with lower limits for debt consolidation or business use. Your income still has to support the larger loan.

Does remortgaging affect my credit score?

A full remortgage involves a hard credit search, which leaves a mark on your file but has a small and temporary effect. Making several applications in a short period is what causes problems, which is why a broker checks eligibility before applying. A product transfer usually involves no credit search.

Is there stamp duty on a remortgage?

No. There is no stamp duty on a straight remortgage because no property is being bought. Stamp duty can apply to a transfer of equity if money changes hands above the threshold, for example when buying out a partner’s share with a large payment. Your conveyancer will confirm this.

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