Your Handy Guide to Remortgaging and Switching Deals

Unless you’ve had the joy of doing it yourself, you may not know the ins and outs of remortgaging. It’s one of those occasional tasks that homeowners have to think about – alongside servicing the boiler and getting the chimney swept. Remortgaging is a job that directly impacts your pocket – because switching to a different mortgage deal for you can save you hundreds of pounds. We’re here to explain what remortgaging is so you’re clued up and ready when the time is right.

What is remortgaging? 

Remortgaging is the process of replacing the mortgage on your existing property with another. This new mortgage deal can either be with the same lender or a different one.

Just like you may shop around for more affordable insurance rates, the same goes for your mortgage. At Purplebricks Mortgages, we can search thousands of mortgage deals from different lenders to find the right one for your circumstances.

When should I remortgage?

There’s no one clear-cut answer as to why or when you should remortgage. A few good reasons to consider a remortgage include: 

• You want to take advantage of interest rates 

If you’re on a mortgage that is impacted by the current interest rates, then switching deals could help you save money. Lock in a lower interest rate to enjoy saving money on your mortgage. Keep in mind you may need to pay an early repayment charge to your lender, but a mortgage advisor will be able to help check whether it’s worth it in your situation.

• You want to move mortgage types

You may want to move from an interest-only mortgage to a repayment deal, depending on your circumstances and future goals. Are you not sure about the different types of mortgages? We’ve got a handy little breakdown here.

• Your fixed-rate mortgage deal is coming to an end 

Once the initial period of your fixed-rate mortgage comes to an end, you’ll automatically move to a standard variable rate (SVR), which often has higher interest rates, meaning you’re paying more each month. Switching before your deal ends can help you lock in a lower interest rate – and keep more money in your pocket.

• You want to borrow more money

Have you got a home extension in mind? Maybe it’s a full renovation of the bathroom instead. If you want to release some cash in your property, you can look into remortgaging, if it makes sense for you. It’s possible to borrow additional money through remortgaging – but we recommend working with an advisor for smooth sailing.

How does a remortgage work?

Firstly, we advise working with a mortgage advisor to get you set up with the right mortgage deal for you. They’ll book you in for an initial chat to understand your financial picture.   In most cases, to remortgage, you’ll need to provide the same information that you did when you first applied for your mortgage. Your advisor will be able to help you prepare the paperwork, but it’s wise to gather the following: 

• Last three months of personal bank statements 

• Last three months of payslips 

• Your most recent P60 (your employer will send this at the end of the tax year) 

• Proof of any benefits you receive (such as Child Tax Credits) 

• A utility bill with your current address 

• Your passport or driving licence 

 If you’re self-employed, you’ll need to prepare the additional documents: 

• Your tax year overview for the past three years, and your last three SA302s (which is a summary of your income sent to HMRC) 

• Last three months of business bank statements from all of your business bank accounts 

• If you own a limited company, you’ll need to supply proof of income. Your mortgage advisor will be able to tell you what documents to prepare based on your individual circumstances 

As your mortgage is all about numbers, it’s worth getting your finances in order first. Lenders will want to see that you (and anyone else on the mortgage) are responsible with money and can afford to pay them back each month. This requires you to detail your income, monthly expenditure, and any outstanding debts.  

 We recommend the following: 

• Check your credit score ahead of time to fix any mistakes  

• Avoid applying for any new credit leading up to your application 

• Avoid spending unusually large amounts of money 

• Avoid going into your overdraft (if this applies) 

How long does it take to remortgage?

In terms of timeline, some lenders will let you apply for your next mortgage up to six months in advance. This means you can avoid falling onto your lender’s standard variable rate (which is often higher in interest). However, this depends on your lender. Ideally, it’s best to work with a mortgage advisor as soon as possible so they can look at the options available to you, and switch you over to a new deal when your current one ends.

Get started on your next mortgage deal

It’s a numbers jungle out there. Get an expert mortgage advisor on side who can do the tough graft of sifting through thousands of remortgage rates and deals to find suitable options. Our Purplebricks Mortgages advisors have access to over 12,000 deals from 90+ lenders and are always on hand to guide you through the process. And because we offer mortgage advice, we can help you decide whether to transfer mortgage products (and stay with the same lender), or switch lenders to lock in a great rate.

Get started with an initial chat to find your next remortgage deal.