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What is a remortgage?

Updated: Mar 2, 2021

Remortgaging means changing your mortgage deal, either by switching to a different lender, or staying with your current lender but getting a different rate from them.

The idea of remortgaging is:

  • Ideally, to cut your monthly mortgage payments.

  • Or to release money (equity) from your property by borrowing more money against it.

You might even be able to do both. Really, it’s just the same as switching your energy, mobile or broadband provider – if you can get on a better rate, you stand to save more.

Homeowners on a standard variable rate mortgage (SVR is a rate determined by your lender) can spend around £3,500 a year more compared to people who remortgage to a new fixed rate deal.

How much can I remortgage my house for?

How much you can borrow depends on a few factors, but mainly how much money you have after paying your regular financial commitments.

Lenders will also look at your LTV (loan-to-value) ratio – the size of your mortgage as a percentage of the current value of your property. For example, a borrower taking on a £150,000 mortgage to purchase a home valued at £230,000 would have an LTV ratio of 65%.

Can I get a buy-to-let remortgage?

The simple answer is yes, any property can be remortgaged – as long as you have enough equity in the property and you’re proposing to increase the rent you charge to more than your mortgage payments will be.

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