Almost a third (29%) of mortgage customers say they either have or will be remortgaging this year, according to Barclays, with average annual repayments set to soar by an eye-watering £3,972.
Seven in 10 of those affected are anticipating higher costs, paying an extra £331 per month on average.
Homeowners coming off five-year fixes are likely to see the biggest jump in repayments, as interest rates are higher now than in 2020.
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Meanwhile, those approaching the end of a two-year fix could see a reduction in repayments.
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Average two-year mortgage rates have now dipped below 5% for the first time since Liz Truss’s mini-Budget in 2022, data from Moneyfacts shows.
It’s a symbolic turning point, according to Moneyfacts’ head of news Adam French.
“While the cost of borrowing is still well above the rock-bottom rates of the years immediately preceding that fiscal event, this milestone shows lenders are competing more aggressively for business,” he said.
If you’re watching the months tick down until it’s time to remortgage, wondering how you’ll be affected by interest rate changes and worrying about the admin involved, you’re not alone.
According to trade body UK Finance, about 1.8 million homeowners with fixed rates will be shopping around for a new mortgage deal this year.
It doesn’t need to be daunting. In this guide, we walk you through the remortgage process and explain everything you need to know so you can secure the best deal for your circumstances.
What does remortgaging mean?
Remortgaging simply means switching to a new mortgage deal. This could be because your current deal has expired and you need a new one. Remortgaging can involve moving to a different lender, or sticking with the same one but taking out a new mortgage deal.
Most borrowers will remortgage every two or five years, which are the most common periods to fix your rate for. You may incur fees each time you go through the process, which can make remortgaging every two years expensive.
According to Barclays, more than a third of those remortgaging this year (35%) are considering transitioning to a longer fixed-rate deal.
Others, perhaps expecting further interest rate cuts in the short-to-medium term, would prefer more flexibility and plan to choose a variable rate or tracker mortgage.
We cover different types of mortgages in more detail in our guide: “Should you fix your mortgage or opt for a variable rate?”
Can you remortgage with the same lender?
Yes, you can remortgage with the same lender. It’s usually called a product transfer or product switch.
You select a new rate to switch to from your current lender’s range, which can take as little as 15 minutes to complete.
Borrowers don’t have to undergo any new credit or income checks, but you may miss out on better deals with lower mortgage rates from competitors.
Aaron Strutt, product and communications director at the mortgage broker Trinity Financial, said: “The vast majority of homeowners do a product transfer and stick with their existing lender rather than switching to another bank or building society.”
The convenience of the product transfer market is so popular among borrowers that UK Finance estimates it will be worth a whopping £254 billion this year, dwarfing the standard remortgage market (where homeowners switch lenders), which is predicted to hit £76 billion in 2025.
However, there are drawbacks. “Borrowers choosing a product transfer do not always have access to the most competitively-priced deals, early repayment charge-free products and specialist mortgages like offset deals,” said Strutt. “They can’t extend the mortgage term or remove parties from the mortgage unless they go through a full application either.”
Reasons why people remortgage
The main reasons people remortgage are:
- Switching to a new mortgage rate when your current deal expires.
- Raising money for home improvements.
- Consolidating other debts such as credit cards and personal loans by increasing the size of your mortgage to pay them off.
- Removing or adding someone to your mortgage.
How remortgages work
Here are the seven steps of a remortgage process:
Step 1: Know your loan-to-value
Your loan-to-value (LTV) indicates how much of the value of your home is mortgage debt and how much you own. The lower your LTV, the cheaper the rate you’ll be offered.
Divide your mortgage balance by the value of your property (which you can find using free tools on Zoopla or Rightmove) to get your LTV ratio. For example, if your mortgage balance is £224,000, and your property is worth £280,000, your loan to value is 80%.
Step 2: Shop around for your next mortgage deal
Compare the rates offered by different lenders in your loan-to-value range.
Rhys Young, senior partner at the adviser Affinity Financial, said: “Assess what options are currently available with your existing lender but don’t assume it has the cheapest rates.”
There are thousands of mortgage deals on the market, so it’s a good idea to get some help.
“Ask your mortgage broker to search the whole market for you to see if any other bank or building society can beat your lender’s deal,” added Young. You can also ask for advice about what sort of product – fixed or variable – to choose.
Step 3: Decide if you want to change the terms of your mortgage
“Remember, you may have the option to reduce or extend your mortgage term, borrow more money or pay off a lump sum during the remortgage process,” said Young.
Ask your lender’s mortgage adviser or a mortgage broker to go through your options.
Step 4: Fill out the application form
Complete a new mortgage application form with all your details and supply evidence of income and identity.
You’ll need to pass the lender’s credit and affordability checks.
Step 5: Property valuation
Not everyone needs a valuation when they remortgage.
Some lenders are happy to rely on a computer-generated valuation rather than sending a surveyor around to your home.
Step 6: Instruct a solicitor
Borrowers who are remortgaging to a new lender will need a solicitor.
Lenders will often offer to pay for your legal work if you use a solicitor of their choice. Be prepared for this to take longer than using your own solicitor.
Step 7: Pay off your old mortgage
Your new lender will transfer enough money to your old lender to pay off your mortgage balance. If you’ve decided to increase the size of your mortgage, any money left over is paid to you.
How long does it take to remortgage?
A typical remortgage can take four to eight weeks to complete but be prepared for it to take longer if you’re using your lender’s offer of free legal work. In this case, it can take more than six weeks.
Avoid slowing the process down by answering the conveyancer’s questions promptly and in full and providing the correct, in-date documentation when asked.
How soon can you remortgage?
You can begin the remortgage process up to six months before your existing mortgage rate expires.
Most lenders will allow new borrowers to complete the remortgage application and legal work in advance and reserve their rate until they are able to switch deals without incurring a penalty.
That way, borrowers can transfer seamlessly from one deal to another.
Note that if you’re doing a product transfer and staying with the same lender, some banks and building societies have reduced the time window to lock in a new mortgage deal from six months to just three or four months before your current deal ends.
What happens if you don’t remortgage?
By not remortgaging before the end of the mortgage deal, you end up on your lender’s standard variable rate (SVR), which could be more than three times the cost of your previous rate.
For example, a borrower with around 40% equity in their home who fixed their rate for five years in 2020 would likely have been offered an interest rate of around 2%.
When that rate expires in 2025, unless they have arranged a remortgage, their rate reverts to their lender’s SVR. According to Moneyfacts, the average SVR is 7.42%, as of August 2025.
By remortgaging, they could lock in a rate of around 4 to 5%.
What happens if you remortgage early?
If you remortgage before your current deal expires, you are likely to incur an early repayment charge from your lender. Tracker mortgages are typically the exception to this rule. They tend to be penalty free.
Different lenders use different fee structures. Take the 3.94% five-year fix, currently on offer from Barclays. This comes with a 4% early repayment charge until 30 September 2030.
“On a £300,000 mortgage, that would be a £12,000 penalty in year five. I am pretty sure people could think of better ways to spend this money rather than handing it to a bank," Strutt said.
By contrast, Santander has previously offered a five-year fixed rate deal with an early repayment charge that declines over the course of the term. It means that in the final year, it reduces to 1%, or £3,000 on a £300,000 mortgage.
Does a remortgage affect your credit score?
That depends on whether the lender carries out a soft or hard credit check. A soft credit check will not leave behind any trace, often referred to as a footprint, on your credit report. A hard credit check will be visible on your credit history.
If you’re shopping around for a mortgage, check which type of search the lender will carry out.
Having multiple searches show up on your credit report, particularly if you are declined, can damage your credit score as it signals you could be in financial distress.
What to consider when remortgaging
Here are four things to consider when remortgaging:
- What rate is your existing lender offering compared to other banks and building societies?
- Do you need advice around raising money or changing the terms of your mortgage? You will not receive advice if you are switching deals with the same lender.
- Should you take a two, three or five-year fixed rate – or perhaps even longer if you are looking for stability in your budget? Or, would a variable deal be more suitable for you?
- Have your income or credit circumstances changed since taking out the mortgage? Borrowers who switch rates with their current lender do not undergo new income and credit checks.
