A mortgage is usually the largest monthly bill a household carries, so the point at which a cheap introductory deal ends can have a big effect on the family budget. Many homeowners drift onto a more expensive rate simply because they never looked at their options.
In this article we will explore when remortgaging makes sense, the costs and checks involved, how to compare deal types, and a sensible step-by-step plan for acting before your current deal runs out.
Why remortgaging matters when a deal ends
Most UK mortgages are made up of two stages. The first is an initial deal period, often two, three or five years, during which the rate is fixed or follows a set formula. The second begins when the deal ends, and the lender moves the loan onto its standard variable rate unless you choose something else. That standard rate is set by the lender, can change whenever it decides, and is frequently higher than the rates offered on new deals.
Remortgaging means replacing your existing mortgage with a new one, either with a different lender or with the same lender on new terms. The aim is usually to lower the cost, to change the type of deal, to borrow more or less, or to release or repay part of the debt. It does not involve moving home, and it generally does not involve a new purchase, so Stamp Duty does not apply. Your property remains the security for the loan, which is why it is a serious decision rather than a routine bill.
Timing is the main thing to get right. If you leave it until the last week, you may have to take whatever is available, or pay the standard variable rate while the paperwork is completed. If you start too early, you may run into early repayment charges, which are fees for leaving a deal before its end date. The sweet spot is normally a few months before the deal expires, when many lenders will let you reserve a new rate without leaving your old deal early.
It is also worth saying plainly that remortgaging is not always the best step. If you are close to the end of the mortgage term, have a small balance left, or your finances have changed so that you would struggle to pass affordability checks, a switch may not be worthwhile or may not be available. In those situations, a product transfer with your own lender, a change of term or an honest conversation with an adviser can work better. The sections below explain how to weigh these options.
Life events often prompt a remortgage as well. Some people want to release a little equity for a building project, others want to move from interest-only to repayment, and others want to remove a former partner from the loan after a separation. Each of these changes is more than a simple rate switch, because the lender will assess it as a fresh lending decision. If any of them applies to you, speak to a regulated adviser early and be honest about your plans.
Reversion rates and the end of your current deal
When your deal ends, your mortgage letter or online account should show the date and the rate that will apply afterwards. Lenders are expected to write to you ahead of the end date, and many also send reminders by email. Look for this paperwork now, because it tells you the exact end date, the balance, the remaining term and any charges that apply. If you cannot find it, contact your lender and ask for a written summary.
The rate you move onto is called the reversion rate, and for many borrowers it is the standard variable rate. Some older mortgages instead revert to a rate set at a margin above the Bank of England base rate. Either way, the reversion rate is not locked in, so your payments can move up or down while you remain on it. Compare it with what is on offer today, and consider how much extra it would cost you each month and each year.
Staying on the reversion rate is not forbidden, and it can make sense in specific cases. Many reversion products have no early repayment charge, so you can leave at any time, which is helpful if you plan to sell soon or are waiting for a change in circumstances. Some people stay briefly while a remortgage completes, or while they decide between options. The danger is drifting there by default, for months or years, without ever checking.
Remember that leaving a deal early is a different matter from leaving it at the end. During the deal period, an early repayment charge usually applies if you repay the whole loan, and often if you repay more than the permitted overpayment allowance. Check your paperwork for the exact rules, including how the charge is calculated and whether it applies when you sell the property. Never assume that a charge has been waived unless your lender has confirmed it in writing.
Do not ignore the date even if you are busy or worried about money. A calendar reminder four to six months before the end of the deal gives you time to gather paperwork and compare offers. If you have difficulty making payments, contact your lender early, because lenders are expected to treat borrowers in financial difficulty fairly and to discuss options. Free, impartial help is available from MoneyHelper, Citizens Advice and debt charities, and none of these will pressure you to take a product.
Product transfers and full remortgages compared
There are two main routes when a deal ends. A product transfer means staying with your existing lender and choosing a new rate. A full remortgage means moving the loan to a different lender, which involves a fresh application, a valuation and legal work. Both can lead to a good outcome, and the best choice depends on your circumstances and the offers available at the time.
A product transfer is usually faster and involves less paperwork. Many lenders do not repeat full affordability checks for existing customers who are simply switching rates and not borrowing more, although policies differ. That can help borrowers whose income has dropped, who are self-employed with variable earnings, or whose circumstances have changed since they first borrowed. The trade-off is that the rate on offer may not be the best on the market, because you are choosing from only one lender’s range.
A full remortgage opens the whole market, which may produce a better rate or more flexible features. It requires you to meet a new lender’s criteria, including income checks, credit history and the value of the property. A lender will also usually arrange a valuation, and legal work is needed to transfer the charge on your home. In Scotland, the legal charge is called a standard security, and the conveyancing steps differ from those in England, Wales and Northern Ireland, so ask your solicitor how the process works locally.
Both routes lead to the same result, a new rate on your home loan, but they differ in effort and choice. The table below sets out the main differences in plain terms. It is a good starting point for deciding where to look first.
| Feature | Product transfer with current lender | Full remortgage to a new lender |
| Choice of deals | Only your lender’s range | Wide range across the market |
| Feature | Product transfer with current lender | Full remortgage to a new lender |
| Speed | Often quick | Usually slower |
| Affordability checks | Often lighter if not borrowing more | Full checks expected |
| Valuation and legal work | Often none or minimal | Normally required, sometimes paid for by the lender |
| Best suited to | Changed circumstances or a need for speed | Seeking the lowest overall cost or new features |
| Main risk | Missing a better deal elsewhere | Being declined or facing delays |
Ask for quotes on both routes, and make sure you compare like with like. A broker can show you both, and a good one will say clearly if staying put is the better choice. Do not assume that your current lender’s offer is the best they can do, because sometimes better rates are available online or through advisers only. Check what the lender will do if your circumstances have changed since you took out the loan.
Costs to add up before you switch
Many people look only at the interest rate, but the full cost of switching includes several other items. Adding them up before you commit is the only way to judge whether a deal is truly cheaper. Start by asking your current lender for the exact amount of any early repayment charge, because this is usually the largest single cost if you leave before your deal ends. It is normally a percentage of the amount you repay, and the percentage often falls as the deal approaches its end.
Next, look at fees on the new deal. An arrangement or product fee is common and varies between lenders, with some offering deals with no fee but a higher rate. You may be able to add the fee to the loan, which spares you paying cash upfront but means you pay interest on it for as long as the loan lasts. Ask whether there is also a booking fee, a fee for transferring the funds or a fee for the lender’s valuation.
Then think about valuation and legal costs. Many lenders offer free valuations and free standard legal work on remortgages, though the conditions vary and the legal work may be limited to a standard panel firm. If you need to use your own solicitor, or if your case is unusual, you may pay for it yourself. Your existing lender may also charge an exit fee or a fee for releasing the charge on your home, so ask for a full list of charges in writing.
If you use a broker, ask how they are paid. Some charge a fee, some receive commission from lenders, and some do both, and they should explain this before you proceed. A fee does not mean the advice is better or worse, but it does affect your total cost. Make sure you receive the key facts illustration for any product, because this document sets out the rate, the payments, the charges and the main risks in a standard format.
To judge a deal, work out the total cost across the period you expect to hold it. Add the interest you will pay, plus all fees and charges, then subtract any cashback. Compare that figure with the cost of the alternative, including staying on the reversion rate. A simple break-even check divides the total upfront cost of switching by the monthly saving, giving the number of months it takes to recover the cost. If you expect to move or change the mortgage before then, the switch may not pay off.
Take care when comparing deals that have different fees and rates. A deal with a low rate and a high fee tends to suit a larger loan, because the saving on interest is spread across more borrowing. A deal with a slightly higher rate and no fee can suit a smaller loan, or someone who may leave the mortgage early. Running both sums side by side, ideally with the help of a regulated adviser or a lender’s own calculator, shows which really costs less.
Choosing between fixed, tracker, discount and offset deals
A fixed rate keeps the interest rate the same for a set period, so your payments stay predictable. This suits people who want certainty, who have a tight budget or who expect rates to rise. The cost of that certainty is that you will not benefit if rates fall, and leaving early usually means paying an early repayment charge. Compare different fixed periods, because a longer fix gives more certainty but also locks you in for longer.
A tracker rate follows an external rate, usually the Bank of England base rate, plus a set margin. Your payments rise and fall as the base rate moves, which can help if rates fall and hurt if they rise. Some trackers have no early repayment charge, which gives flexibility, but you need a budget that can cope with higher payments. Read the terms carefully, because some trackers have a floor below which the rate will not fall.
A discount deal takes a set reduction off the lender’s standard variable rate for a period. Because the lender controls the standard rate, you do not get the same protection as with a tracker, and your payments can still change. These deals are less common than they once were, but you may still see them. Check how the discount compares with the rates on fixed and tracker deals before you accept one.
An offset mortgage links your savings to your mortgage so that interest is calculated on the loan minus the balance of the linked account. You do not earn interest on the savings, but you pay less interest on the loan, which can suit higher-rate taxpayers and people with large savings. Offset deals often have a slightly higher rate, so they work best when the savings balance is large enough to outweigh that. They also require discipline, since money you withdraw increases the interest you pay.
Other features matter too. Check how much you can overpay each year without a charge, because many deals limit this to a set percentage of the balance. Check whether the mortgage is portable, meaning you can take it with you if you move, subject to the lender approving the new property. Look at the loan to value band, because a lower ratio of loan to property value commonly gives access to better rates, which is a reason to repay some debt or wait for house price growth before you switch.
Preparing your application and meeting affordability checks
Lenders must check that you can afford the loan, and this applies to a full remortgage in the same way as to a first purchase. They look at your income, your regular spending, your existing debts and your credit history. They may also test whether you could cope if rates rose. Gather the documents early so that a delay does not push you past your deadline.
Typical paperwork includes recent payslips, bank statements, proof of identity and address, and your current mortgage statement. If you are self-employed, expect to provide tax calculations or accounts for a period of years, and a letter from an accountant may help. Lenders differ in how they treat bonuses, overtime, rental income and benefits, so a broker’s knowledge can save you from applying to the wrong lender. Keep your credit file in good order as well.
Check your credit reports with the main credit reference agencies before applying. Look for errors, old addresses, accounts you do not recognise and missed payments, and ask for corrections where something is wrong. Avoid making lots of separate credit applications in the weeks before a mortgage application, because each full search can leave a footprint. Registering on the electoral roll at your current address is also widely recommended, since lenders use it to verify identity.
Think about how much you want to borrow. If you are tempted to borrow more to fund home improvements or to clear other debts, weigh the costs carefully. Rolling unsecured debts into a mortgage may lower the monthly payment, but you pay interest over a much longer period, and the debt becomes secured against your home. Extending the mortgage term has a similar effect, trading lower payments now for a higher total cost. Seek independent advice if you are considering this.
Another point to weigh is what happens to your protection if your income falls. A mortgage is a long commitment, so it is sensible to think about how you would cope with illness, redundancy or a rise in other costs. Check whether you have an emergency fund, whether any insurance cover is in place and whether your employer offers sick pay. None of this is a reason to avoid switching, but it helps you pick a deal and a term that you could keep up with in a harder year.
Once you apply, the lender will normally value the property, check your documents and issue a mortgage offer. The offer is usually valid for a limited period, often a few months, and you will need to complete the switch before it expires. Keep an eye on your existing deal’s end date and any charges. Read the offer carefully, and ask your adviser or solicitor about anything you do not follow before you sign.
Using a broker and avoiding common pitfalls
A mortgage broker can compare deals across many lenders and handle much of the paperwork. Brokers in the UK that advise on residential mortgages must be authorised and regulated by the Financial Conduct Authority, and you can check the firm on the FCA register. Ask whether the broker looks at the whole market or only a limited panel of lenders, and ask how they are paid. A good broker will explain the reasons for their recommendation in writing.
You can also search directly, using comparison tools and lender websites, and many borrowers combine both approaches. If you use comparison tools, remember that the results may show only certain lenders, and that rates and eligibility can change quickly. Always check the full terms before applying, including fees, early repayment charges and what happens at the end of the deal. Do not rely on a headline figure alone.
Rules and practice also vary a little across the UK. Mortgage regulation by the Financial Conduct Authority applies in all four nations, but property law, conveyancing and some court procedures differ in Scotland and Northern Ireland. If you ever fall behind on payments, the possession process also follows local rules, which is a further reason to contact your lender and an independent adviser quickly. Ask your broker or solicitor to explain any local differences before you proceed.
Some common pitfalls are easy to avoid. One is leaving it too late and paying the reversion rate for longer than necessary. Another is choosing the lowest rate without noticing a high fee that cancels the saving. A third is picking the longest fixed period when you are likely to move house, and then paying a charge to leave early. A fourth is making an application that is declined, which can leave a mark on your credit file and waste time.
Be careful with buy-to-let mortgages, because the rules differ. Many buy-to-let mortgages are not regulated in the same way as residential mortgages, and lenders assess affordability using the expected rental income. Consent-to-let arrangements, where a residential mortgage holder lets out the home, also come with conditions. If you let out a home, tell your lender and take advice, because breaching the terms can have serious consequences.
If something goes wrong, you have routes to complain. Start with the firm’s own complaints process, and if you are not satisfied, or the firm does not respond within the time allowed, you can take the matter to the Financial Ombudsman Service, which is free to use and independent. Citizens Advice can help you decide how to proceed. Keep a record of your calls, emails and any advice you received, as this will help if there is a dispute.
Conclusion
Start about six months before your current deal ends. Find your mortgage statement and note the end date, the balance, the remaining term, the current rate and the early repayment charge schedule. Check what the reversion rate will be, and calculate how much more you would pay each month if you did nothing. Write down your plans for the next few years, such as moving, having children, changing jobs or overpaying, as these will shape the best type of deal.
Then gather your documents and check your credit reports. Fix any errors, pay off small debts if you can and avoid applying for new credit. Decide how much you want to borrow and over what term, and be cautious about extending the term simply to reduce the payment. If you are unsure about the value of your home, check recent sale prices of similar properties nearby, since a better loan to value band can open up cheaper deals.
Next, compare your options. Ask your current lender for its product transfer rates, and compare them with deals from other lenders, either directly or through a regulated broker. For each option, calculate the total cost over the period you plan to hold it, including fees, charges and cashback, and check the break-even point. Read the key facts illustration, and ask about overpayment limits, portability and what happens when the deal ends.
Finally, act in good time. Secure a deal when you are comfortable, and check whether you can switch to a better one if rates move before completion. Keep copies of everything, and diarise the end date of the new deal so you can repeat this process. This guide gives general information only and is not personal advice, so confirm current rules and figures with GOV.UK, the FCA or MoneyHelper, and speak to a regulated adviser if your situation is complicated or if you are struggling with payments.
