Remortgaging involves moving a mortgage to a new lender or switching to a different deal with your existing mortgage provider. When the period of a fixed rate ends, remortgaging can enable you to save money by securing a better deal, or allow you to release equity from your property to fund renovations, depending on your financial circumstances. While it may not be right for everyone, it presents an opportunity to reduce monthly repayments, reduce the mortgage term and secure a more flexible mortgage deal.

JMW provides the legal expertise necessary to navigate this transition while protecting your financial interests. When you switch to a different lender, there is similar legal work involved in agreeing the deal as there is when you first purchase a property, as the lender needs to be satisfied that their own legal needs have been taken care of.

Here, our experienced remortgage team explains the process from start to finish, why it may be valuable to remortgage when an existing deal ends, and how to make the most of a new deal, whether your goal is to reduce monthly outgoings, release equity, or increase flexibility.

Why Remortgage?

Remortgaging replaces one mortgage with another, using funds from a new lender to pay off the existing debt. Most homeowners remortgage at the end of an existing fixed rate deal. In these cases, you will move onto your lender's standard variable rate (SVR), which is often a much higher interest rate than you received with your fixed deal. Securing a new, more favourable deal (potentially with a new fixed term) can lower monthly repayments compared to remaining with the initial mortgage once the SVR applies.

The process of remortgaging depends on whether you remain with your current lender or switch to a new provider. Staying with a current provider is a product transfer and there is less legal work involved, but moving to a different building society or bank often provides access to superior rates and better deals. It is important to consider what you want to achieve when examining new mortgage deals, to determine whether staying with the same lender or switching is the better option.

When Does the Remortgage Process Start?

If you are aiming to switch to a new deal before the SVR kicks in on your current mortgage, you can start to search for remortgage deals up to six months in advance. Many mortgage offers last for up to six months, so early action gives you time to compare products and secure an agreement in principle at a competitive rate without the pressure of the high-interest SVR or the risk of losing your preferred option.

The process typically takes four to eight weeks from the receipt of a formal mortgage offer, and starting early allows you to align the completion date with the end of your current mortgage deal, before your interest rate increases. Before you start, you should check your latest mortgage statement to identify your current interest rate and the deal's expiry date. You should also check your credit history and settle as many outstanding credit commitments as possible, to give yourself access to the best possible deals.

If you are remortgaging for another reason, verifying the expiry date for the fixed term of your first mortgage is especially important, as early repayment charges (ERC) or exit fees may apply. These charges can be substantial, as they are often calculated as a percentage of the total loan. If these fees are excessive, it may be more economical to wait until the deal expires before completing the remortgage.

How Does the Remortgage Process Start?

The first step of the remortgage process is to secure an agreement in principle, which is a statement from a provider indicating how much it is willing to lend based on a preliminary assessment. Most lenders offer a "soft" credit check that does not impact your credit score, and use this to verify that you meet the initial lending criteria. While not a binding mortgage offer, an agreement in principle enables you to compare the deals on offer. A mortgage broker often provides access to fixed-rate deals or interest-only mortgages that are not available directly to consumers, and so it can be worthwhile to explore your options.

When you are in a position to review mortgage deals and find the right option for your financial situation, the next step is to make a mortgage application.

Submitting a formal mortgage application

When a deal is selected, you must submit a formal application. The lender will conduct affordability checks to verify that you can maintain monthly payments (including in the event that interest rates rise on a variable rate mortgage).

Lenders require proof of income and identity to confirm financial stability. Standard requirements include:

• Three months of payslips
• The last two years of P60s
• At least three months of bank statements
• Your latest mortgage statement
• Proof of identity and current address

Lenders will also require a property valuation to ensure the house value supports the loan amount. This determines the loan to value ratio, which may unlock better interest rates and more flexible products.

Finally, the lender usually instructs a surveyor for a valuation. This is important, as it takes account of the ways your property has changed over time. For example, if significant home improvements have been made, an increased house value may improve the deals on offer and reduce costs.

The Legal Stages of the Remortgaging Process

Once the lender issues a formal mortgage offer, JMW will manage the legal transfer from the existing lender to the new one.

Instructing your solicitor

When you instruct a solicitor, they will act on your behalf and for the new lender to confirm that the security is valid. The team at JMW will review the mortgage offer terms and carry out necessary searches. We will verify the title deeds to check that no issues affect the lender's security and direct coordination between you, the lenders, and your solicitor.

Reviewing the mortgage offer

Our team will receive the mortgage offer directly and review it for accuracy regarding the mortgage term, interest rate, and specific conditions. Any concerns can then be highlighted before proceeding to align the term correctly with your financial goals.

Signing the mortgage deed

The mortgage deed is the legal document creating a charge over the property in favour of the lender. By signing, you agree to the terms and acknowledge the lender’s legal interest in the property. JMW explains the implications of the mortgage deed to ensure you are fully informed before signing.

Managing the transfer of mortgage funds

After legal checks are complete and the mortgage deed is signed, JMW agrees a completion date and requests the funds from the new lender to pay off the old mortgage. This requires a redemption statement from the existing lender, which calculates the debt, exit fees, and interest due. Other costs to facilitate the remortgage may also apply in these cases. Once settled, JMW registers the new charge with HM Land Registry. If you are releasing equity for home improvements, JMW will transfer the remaining funds to your bank account on the completion date.