Remortgaging doesn’t always have to wait until your current mortgage deal ends. Some homeowners switch early to secure a new interest rate, borrow more money or avoid moving onto their lender’s Standard Variable Rate (SVR).
You can remortgage before your current deal ends, but there are a few things to check first. Keep reading to learn how early you can remortgage, the costs involved, and when it could be the right time to switch.
Can You Remortgage Early?
Yes. You can remortgage before your current mortgage deal ends.
The first thing to check is whether your lender charges an Early Repayment Charge (ERC). This is a fee for leaving your mortgage before the end of a fixed-rate, tracker or discounted deal. The charge is usually a percentage of the amount you still owe and often reduces as you get closer to the end of your mortgage deal.
Paying an ERC doesn’t always mean you should wait until your deal ends. If your new mortgage offers a lower interest rate, lower monthly repayments or better terms, the savings over time could be greater than the cost of switching. It’s worth comparing the total cost of the ERC and any other fees against the amount you could save with a new deal.
If you’re staying with your current lender, you may be able to switch to a new mortgage deal through a product transfer. If you’re moving to a different lender, you’ll usually need to complete a new mortgage application and affordability checks before your remortgage is approved.
How Early Can You Remortgage?
This is when most homeowners start looking for a new mortgage. Many lenders let you apply for a remortgage up to three to six months before your current deal ends. If your application is approved, your new mortgage can start as soon as your existing deal finishes.
Applying during this period also gives you time to compare lenders, complete the legal work and avoid moving onto your lender’s Standard Variable Rate (SVR).
Three to Six Months Before Your Deal Ends
You don’t have to wait until the last few months of your mortgage deal. You can remortgage at any time, but you’ll usually need to pay an Early Repayment Charge (ERC) if you leave a fixed-rate mortgage early.
Some homeowners still decide to switch before their deal ends, especially if a lower interest rate could save them more than the cost of the ERC. Before making a decision, compare the total cost of switching with the amount you could save over the new mortgage term.
Before Your Fixed Rate Ends
You can remortgage before your fixed-rate deal ends, but you may have to pay an Early Repayment Charge. Check how much the fee will be before deciding whether switching early is worthwhile.
After Your Fixed Rate Ends
Once your fixed-rate deal ends, your mortgage will usually move onto your lender’s Standard Variable Rate (SVR) unless you’ve already arranged a new deal. The SVR is often higher than fixed-rate mortgages, which can increase your monthly repayments.
If your mortgage has already moved onto the SVR, you can still remortgage. In many cases, switching to a new fixed-rate deal could help lower your monthly repayments.
What Are the Benefits of Remortgaging Early?
Remortgaging early can help you save money, secure a better mortgage deal or make changes to your current mortgage before your existing deal ends. Here are some of the main benefits:
Secure a New Interest Rate
Mortgage interest rates can change throughout the year. If rates are increasing, remortgaging early may allow you to secure a lower rate before your current deal ends. This could reduce your monthly repayments and the total amount of interest you pay over your mortgage term.
Avoid the Standard Variable Rate
The Standard Variable Rate (SVR) is usually higher than many fixed-rate deals and can change at any time. Moving onto the SVR could increase your monthly repayments if you don’t arrange a new mortgage before your current deal ends.
Borrow More Money
Remortgaging can give you the opportunity to borrow more against your property if you’ve built up enough equity. The additional borrowing could be used for home improvements or to buy another property, subject to your lender’s affordability checks.
The amount you can borrow will depend on factors such as your income, credit history and loan-to-value (LTV). For example, borrowing £180,000 on a property worth £300,000 gives you an LTV of 60%. A lower LTV can give you access to more competitive mortgage deals. You also don’t usually need a deposit to remortgage, as you’re borrowing against the equity you’ve already built up in your home.
Change to a Mortgage That Suits You Better
Your current mortgage may no longer offer the features or interest rate you’re looking for. Remortgaging gives you the chance to compare fixed-rate, tracker and other mortgage deals, so you can choose one that better matches your budget and how you’d like to manage your repayments.
What Are the Costs of Remortgaging Early?
Remortgaging early can involve more than one cost, so it’s important to know what fees may apply before switching.
| Cost | What It Means |
|---|---|
| Early Repayment Charge (ERC) | A fee your lender may charge if you leave your current mortgage deal before it ends. |
| Arrangement Fee | A fee charged by your new lender for setting up your mortgage. Some deals don’t include this fee. |
| Valuation Fee | Your new lender may charge for valuing your property, although some mortgage deals include a free valuation. |
| Legal Fees | Some remortgage deals include free legal work, while others require you to pay your own solicitor’s fees. |
| Exit Fee | Some lenders charge an administration fee when your mortgage account is closed. |
Is It Worth Remortgaging Early?
Yes, if the money you could save is greater than the cost of switching. Even if your lender charges an Early Repayment Charge (ERC), remortgaging early can still be worthwhile if your new mortgage offers a better rate or lower overall borrowing costs.
Remortgaging early can also give you more certainty. Locking in a new fixed-rate deal means you’ll know what your monthly repayments will be for the length of your mortgage deal, even if interest rates change.
Every mortgage is different, so it’s a good idea to compare the total cost of your current deal with the one you’re considering.
Thinking About Remortgaging?
Remortgaging isn’t just about finding the lowest interest rate. The right mortgage should also suit your budget, how long you’d like to fix your rate and any plans you have for your property or finances.
At JG Mortgage Services, our Trusted Remortgage Specialists can compare mortgage deals from a wide range of lenders, explain the costs involved and help you find a mortgage that suits your circumstances. Whether you’re coming to the end of your current deal or thinking about switching early, we’re here to help you explore your options.
FAQs
Can I remortgage with the same lender?
Yes. This is known as a product transfer. It allows you to switch to a new mortgage deal with your current lender without moving to a different bank or building society.
Will remortgaging affect my credit score?
Your new lender will usually carry out a credit check as part of your application. A single application is unlikely to have a major impact on your credit score.
How long does a remortgage take?
Most remortgages take between four and eight weeks, although the timescale can vary depending on your lender and how straightforward your application is.
Can I remortgage if I’m self-employed?
Yes. You’ll usually need to provide proof of your income, such as SA302 tax calculations or certified accounts, depending on your lender’s requirements.
Can I remortgage if my home’s value has increased?
Yes. An increase in your property’s value could improve your loan-to-value (LTV) ratio, which may give you access to more competitive mortgage deals.
