Remortgages

What is remortgaging?

Remortgaging is when you replace your existing mortgage plan with new terms. It could help you find a better deal and reduce your monthly mortgage payments, while also freeing up funds for home improvements or to help with life’s important moments – like a wedding.

Guide to remortgaging

Remortgaging may work best for homeowners who’ve seen an increase in market value since they bought their house and want to make new financial plans.

In this situation, your property is – in theory – worth more than when you bought it, considering your mortgage repayments to date and the estimated increase in value.

The equity you hold in your property is its current value minus your outstanding mortgage.

For example: Your home is currently worth £250,000. You still have an outstanding mortgage of £180,000, which means the equity in your home as it stands is £70,000.

You can use this equity value to calculate your loan-to-value rate (LTV), which is given as a percentage. A lower LTV rate can be a great way to secure lower interest rates on your remortgage deal. This may mean:

• Lower monthly instalment going forward
• Money saved on paying interest over the term of your mortgage.

The alternative is to borrow more money than you currently owe against the value of your home. You’ll receive the difference as a lump sum in your bank account to use for your chosen purpose.

For more information, read our guide to remortgaging to release equity in your home.

Before you apply…

Remortgaging is about turning your current financial situation into a way to save money on mortgage repayments or raise some much-needed cash as a lump sum.

You’ll benefit from applying for a remortgage if your financial situation is improving. However, if your home has decreased in value or your credit report has been negatively impacted, you could end up paying more per month than you set out to.

Before you apply, check out our guide on what you need to know before remortgaging.

Am I eligible for a remortgage?

Your eligibility depends on several factors, including how much equity you currently have in your home, its current value and your own financial situation. Every lender has their own criteria when it comes to deciding whether to offer you remortgage terms, so we work with you to find a loan that suits your circumstances.

Be sure you can afford any new repayment plans and cover any fees before deciding whether to switch to the new terms or not. For more advice, check out our guide to remortgaging with bad credit.

Costs of remortgaging

There may be fees involved when it comes to remortgaging. The process often requires contractual changes, so it’s important to consider these before deciding whether to remortgage.

Switching lenders could incur an early repayment charge if you’re still fixed into a deal, meaning you must pay your old lender for moving your mortgage. For example, a fixed rate mortgage will normally have an early repayment charge if you repay or change your mortgage during the initial fixed-rate period.

Some mortgages may have administration charges to consider, including booking, valuation and conveyancing costs. Not all lenders will charge these, but you may want to look into it before making any commitments. When you apply for a remortgage with us, we’ll make clear all the possible fees you could face at each stage of the remortgage process.

Pros and cons of remortgaging

Like any important decision in life, you should weigh up the pros and cons of remortgaging before making the big commitment.

Pros of remortgaging

• Raise additional funds
  Whether it’s increasing the resale value of your property with a new extension or financing a wedding, you may need the extra cash to take the next step. By remortgaging, you can free up funds against your property, giving you a lump sum to spend as you need.
• You may find a better rate
  With property values increasing over time, your home may be worth more than when you bought it. By getting a remortgage quote, you can often find a much cheaper rate, meaning you could potentially save on the interest you’re paying.

Cons of remortgaging

• There are fees to consider
  When switching lenders, you may have to pay your original lender a penalty fee. This is called an Early Repayment Charge. Not all mortgages have Early Repayment Charges - it will depend on the type of product you have - so it’s important to see whether any potential costs outweigh the benefits you’ll get from any cash sum or new repayment plan.
• You don’t have much equity yet
  If you’ve only just purchased your home or don’t have much equity invested yet, it’s unlikely you’ll find a better rate. You may find it’s worth waiting until you’ve paid off more of your mortgage before considering a switch.

Types of remortgages

There are different types of remortgage loans to suit your individual circumstances.

Buy to let remortgages

Remortgaging your buy to let property can help you secure better terms and free up cash.

Find out more

Business remortgages

Secure a better deal on monthly repayments and reinvest the savings elsewhere in your business.

Find out more

Consolidation remortgages

Raise money to help cover the cost of other debts by remortgaging your property.

Find out more

Bad credit remortgages

A bad credit remortgage could give you more flexible loan terms, provided you can meet the repayments. We have several remortgage options for those with poor credit.

Find out more

Home improvements remortgages

Release some of the equity in your property as a lump sum to spend on home improvements through remortgaging.

Find out more

How much can I borrow as a remortgage?

With Norton Finance you can borrow between £5,000 and £500,000, depending on your financial situation.

Commonly asked questions about remortgaging

Still unsure whether remortgaging is the right move? We’ve compiled answers to the more common questions we get asked at Norton Finance.

How long are the repayment terms?

Our flexible repayment terms range from 3 to 30 years.

What are the interest rates?

Interest rates will depend on your individual circumstances, starting from 1.1%.

Are there any loan fees?

We get our commission from the lender, not the customer. We may charge a broker fee of 7.5% of the loan amount requested, but that’s capped at £2,495.

Do I need a solicitor?

If you’re remortgaging with the same lender, they’ll handle the legal work. However, if you’re switching for a better rate elsewhere or want to release a cash lump sum, a conveyancing solicitor can assist with all the legal paperwork. This is sometimes provided from the lender’s own panel of solicitors.

Do I need a valuation?

You’ll need to get a valuation on your property or know what it is currently worth. This will give you an idea of how much you may be able to borrow and if you could find a better deal elsewhere.

Can I pay off a remortgage early?

You can pay off a remortgage in full at any time during the agreement - but most lenders will charge an Early Repayment Fee if stated in your original mortgage contract. It’s worth considering if these fees will make early repayment worth it.

Applying for a remortgage

There’s a lot to consider when it comes to getting a remortgage quote. That’s why we’ve tried to make the process as easy as possible for all homeowners.

Once you know how much you want to borrow, use our handy tool at the top of the page to help decide whether remortgaging is for you. Once we’ve gathered all the details, we’ll guide you through the next steps of the remortgaging process.