If you own a home in the UK, you’ve probably heard the term “remortgage” tossed around. It’s basically swapping your current mortgage for a new one, often to lock in a lower rate or release cash. Most people think it’s only for those in trouble, but the truth is it can be a smart move for anyone who wants to save money or fund a big purchase.
Equity is the part of your house that you actually own. Lenders look at the loan‑to‑value (LTV) ratio, which is the loan amount divided by the property value. In 2025 most lenders want an LTV of 75‑80 % or lower. That means you need at least 20‑25 % equity to qualify for the best rates.
Want a quick check? Grab your latest valuation (or use an online estimator), subtract the outstanding mortgage balance, then divide by the property value. If you end up with 0.75 or less, you’re in good shape. If not, you might need to wait until you’ve paid down a bit more or consider a smaller cash‑out.
1. Shop around. Don’t settle for the offer your current lender sends you. Use comparison sites, call a few banks, and ask a mortgage broker for a shortlist. Different lenders price risk differently, so you could save hundreds a month.
2. Boost your credit score. A higher score can shave 0.1‑0.3 % off the rate. Pay down credit cards, correct any errors on your credit report, and avoid new credit applications until the deal is locked.
3. Pick the right term. Shorter terms usually have lower rates but higher monthly payments. If you can afford the payments, a 15‑year term often beats a 25‑year one on total interest.
4. Consider fixed vs. tracker. Fixed rates give certainty – you pay the same amount for the whole period. Trackers move with the Bank of England base rate, which can be cheaper now but might rise later. Think about your budget tolerance.
5. Watch the fees. Arrangement fees, valuation fees, and early‑repayment penalties can eat into savings. Some lenders waive fees if you meet certain criteria, like a low LTV or a strong credit profile.
Once you’ve gathered offers, line them up in a simple table: rate, LTV, fees, total monthly cost. The lowest total cost, not just the lowest rate, is what matters.
Remortgaging isn’t just about lower rates. If you have at least 20 % equity, you can also pull cash out for home improvements, debt consolidation, or a big purchase. Just remember that borrowing more means higher monthly payments, so run the numbers before you commit.
In practice, the whole process takes about 4‑6 weeks from start to finish. You’ll need proof of income, recent bank statements, and a valuation. Your new lender will handle the paperwork with your current mortgage provider, and once it’s approved, the old loan is paid off and the new one kicks in.
Bottom line: If you’ve built equity, have a decent credit score, and can afford a bit of paperwork, remortgaging can shave a solid chunk off your mortgage bill. Keep an eye on market moves, compare offers, and don’t be afraid to ask questions. A smarter mortgage means more money left for the things you actually enjoy.
Ever wondered what you’d pay each month for a $150,000 mortgage? This article breaks down the numbers, looks at how interest rates and loan terms affect your payment, and throws in some practical tips to help you save money on your mortgage—whether you're buying new or remortgaging. You'll also get a handle on what goes into your payment besides just the loan amount. It's all straightforward and meant to help you make smart choices.
Remortgaging often raises questions, especially about receiving a lump sum. This long-read article explains whether and how you can get a lump sum when you remortgage, covering the processes and conditions involved. It provides practical tips, interesting insights, and clears up common misconceptions. Ideal for homeowners wondering how they can unlock their home's equity.