A clear, step-by-step walk through how a remortgage works, who is involved, and how long it takes from your first conversation to completion.
There are plenty of reasons you may want to remortgage your home or buy-to-let property. It could be to free up equity for an extension, settle unsecured debts, or simply secure a better mortgage interest rate.
Homeowners coming towards the end of their fixed period will usually receive a letter from their lender confirming the rate they are about to move onto, along with their new monthly payment. This reversion rate is generally higher than what you paid during your fixed period, so remortgaging gives you the chance to move onto a more favourable rate, either because lower-priced products are available, because your loan-to-value has improved (a smaller loan relative to the value of the property), or a combination of both.
So how does the remortgage process work, and how long does it take? The good news is that it is usually faster than buying a property, because the key objective is to satisfy the requirements of the new lender, rather than coordinating a buyer, seller and chain. The steps below explain what to expect.
The first place to start is a conversation with your mortgage broker. Our team can advise on the most suitable mortgage product for your circumstances, give you an idea of what your new payments are likely to be, and explain the process from here. Starting early, ideally a few months before your current deal ends, gives you the best chance of lining up a new rate without slipping onto your lender's higher reversion rate.
Not sure whether now is the right time? Our remortgage guide covers when to start, the costs involved and the questions worth asking before you commit.
Some lenders have their own panel of solicitors, and your broker can recommend someone if you need direction. The FCA does not regulate solicitors.
Your solicitor will carry out the relevant ID checks and review the title deed to confirm you are the legal owner of the property, and whether there are any charges or restrictions that need satisfying.
If the property is leasehold, the solicitor will review the covenants within the lease to confirm who they need to serve notices on regarding the changes being made. They will also confirm that the title is compliant in line with the Council for Mortgage Lenders handbook.
Where there is an existing charge on the property, your solicitor will ask your current lender to provide a mortgage statement so they can discharge the outstanding balance on completion.
If you are releasing funds from the property, this statement also confirms the balance to be paid to you on completion.
Just before completion, your solicitor will carry out a bankruptcy search. Once satisfied, they will set a completion date and request the funds from the new lender. When the mortgage advance has been received, your solicitor will redeem your existing mortgage, settle their invoice and any disbursements, then repay any remaining balance to you.
Once your mortgage has completed, your solicitor will update the details held by HM Land Registry. This process can take up to around six months for freehold properties, and longer for leasehold properties. After this, your remortgage is complete.
If your current deal is coming to an end, it is worth weighing up your choices well before you revert to your lender's standard variable rate. We cover this in detail in our guide to exploring your options when your fixed-rate mortgage ends, alongside the wider remortgage guide.
If you have any questions about remortgaging, we are more than happy to help where we can. You can call us on 01322 553282 or contact us online.
Speak to an adviser who will compare the whole market and guide you through every step, from your first conversation to completion.