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Remortgaging might not be the most exciting job on your “to-do” list, but, if you approach it correctly, it can have lasting financial benefits and save you thousands of pounds over the course of your mortgage.
Whether you’re coming off a cheaper, low-interest five-year fixed deal, and expecting your monthly repayments to increase, or a higher-rate two-year mortgage that is set to come down, you need to take time out to look at all your options when it comes to remortgaging.
We spoke to four mortgage experts about the common mistakes people make when they come to switching mortgages – and how to avoid them.
The most common mistake that all the experts flagged was that borrowers looking to remortgage will often leave things too late. This not only reduces their options and means any paperwork needs to be rushed through, but it also increases the likelihood that they will end up paying the lender’s Standard Variable Rate, which is expensive even if it’s only paid in the short term.
“For thousands of homeowners, remortgaging is one of the biggest financial decisions they’ll make, yet for many, it’s often a missed opportunity – there is a big gap between simply renewing a mortgage and proactively seeking out the best possible deal,” says Karen Barratt, founder and chief executive of Unbiased.
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“This often happens because either the preparation starts too late – ideally, this needs to be on your radar six months before a deal ends – or because small, recent missteps, like a new credit application, have unexpectedly limited their options.”
Leaving yourself six months to plan a remortgage gives you the wiggle room to find the best deal and make sure it goes through by the time you come off your existing plan.
“Many homeowners think two or three months is plenty of time to switch deals, but in reality, they’re cutting it close,” says Rachel Geddes, strategic lender relationship director at Mortgage Advice Bureau.
“Moving from one lender to another is a legal process that can be slow. If you run out of time, you’ll default to your lender’s Standard Variable Rate (SVR) – and that’s a massive bill you don’t want to pay, even for a few weeks.”
If you do leave remortgaging too late, you’ll often find you have no other choice than to stay with your existing lender. While they can offer you another fixed deal, it will often be higher than if you moved elsewhere.
“Often your current lender is not your best option; you could be offered a higher rate than new customers. This can happen where lenders bespoke your risk profile as an existing customer,” says John Everest, director of Everest Mortgage Services Ltd.
“Your current lender will also use an indexed valuation on your property to work out your loan to value and offer you products based on their estimate. This can be detrimental where you may have improved the property with adding an extension or loft conversation, however, the current lender is not aware, causing your loan to value to be higher than it should be.”
Having more equity in your home can unlock a better rate of interest which is why it’s so important to estimate your its value correctly, particularly if you’ve done significant work on it.
“If you’ve renovated or if local house prices have climbed, your loan-to-value may have improved significantly,” says Geddes. “A lower loan-to-value often unlocks a lower tier of interest rates, potentially saving you thousands over the life of the mortgage. Don’t assume your lender knows your home’s worth: be prepared to prove it.”
If you’re on a higher mortgage rate and know that your monthly mortgage payments are about to drop, it can be tempting to splash out on a new car or expensive home improvements, but hold off.
“Taking on too much credit card leading up to remortgaging can have huge impacts,” says Everest. “It’s quite often credit cards or car finance that reduce affordability when searching for a new remortgage.”
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Even small finance deals, such as store cards, can have an impact on your credit rating. “Every new line of credit – no matter how small – tinkers with your credit score and impacts your affordability in the eyes of a lender. It doesn’t mean you can’t borrow – but be 100% transparent with your broker about your plans from the outset, as it’s their job to make sure your finances are in check,” says Geddes.
It’s expected that the Bank of England will cut the Base Rate once, and possibly twice, over the course of 2026 so it’s tempting to wait and see how this filters down into the rates lenders are offering.
“While base rate cuts are expected later this year, most lenders have already factored that into their pricing,” says Sonya Matharu of The Mortgage Atelier. “The problem with the ‘wait and see’ approach is that time starts working against you. As deadlines creep up, the pressure builds and when options narrow, people can end up with fewer choices than they were expecting—which can feel incredibly disappointing.”
If you give yourself sufficient time, you can secure a deal and, if rates drop during the remortgaging process, you’re more likely than not be able to switch over to the cheaper rate.
“If a better rate becomes available… we’ll talk it through and move things across if it makes sense so that clients are protected if rates go up, but still benefit if they come down,” adds Matharu.
While mortgage brokers come with a small fee, it’s likely that they will repay dividends in the long term.
“A good broker should be doing more than just hunting for a better rate. They should take the time to understand where you are now, what’s changed since your last deal, and what you’re aiming for next,” says Matharu. “A mortgage isn’t just a product. It’s not like an energy bill you pay each month. It’s part of your wider financial picture, and it can affect lots of different areas of your life.”
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