What’s remortgaging and how does it work?

Owning a home comes with a lot of big questions, especially when your current mortgage deal is coming to an end. Knowing what kind of mortgage to consider and what deals are out there can be difficult to navigate. But it’s important to be clued up about your remortgaging options so that you don’t unintentionally end up on your current lender’s standard variable rate (SVR). This is a usually higher ‘follow on’ rate that lenders move you onto when your deal expires. 

In this article, we’ll go through the most asked questions about remortgaging. If you still need help after that, you can speak to Habito’s mortgage brokers, who’ll help you through every stage of the remortgaging process.

What’s remortgaging?

‘Remortgaging’ means switching to a new mortgage deal with a different lender from the one you currently have. This is often done to get a better interest rate, access more flexible terms, or to release equity (this means taking out some of the money you’ve built up in your home) – especially when your home value has increased.

You can also do what’s called a ‘product transfer’ or ‘rate switch’. This is when you stay with the same lender and move onto a new deal (and likely a different rate) with them. This is technically not a remortgage (although some people still call it that), but the process and benefits can be similar – which might be helpful to know if you’re thinking about remortgaging. 

How long does it take to remortgage? 

The full remortgage process generally takes around four to eight weeks from application to completion.

Most lenders allow you to apply for a new mortgage deal up to six months before your current deal ends. Even if your current lender isn’t offering new rates yet, starting early gives you more time to compare the options available and choose whether to stay or switch.

It’s worth noting that product transfers are usually faster than if you were to switch lenders. This is because you’re unlikely to need any solicitor involvement, and because your current lender already knows your financial history and has all the documentation they need. 

Even so, it’s always a good idea to compare deals across the market before you decide when to remortgage, to make sure you’re not missing out on a better offer.

How does remortgaging actually work?

A product transfer and a remortgage with a new lender both involve updating your mortgage, but they work differently. 

Whether it’s your first time moving to a new deal, or your first time exploring your remortgage options, here’s what to expect from the process when working with our brokers Habito. 

Step 1: Gather your details, and do some research

Think of this part as simply getting your bearings. You don’t need to become an expert, but it’s helpful to gather a few snapshots, like your current equity, and familiarise yourself with key mortgage terms like loan to value (known as ‘LTV’). 

If you have Monzo, you have a shortcut at your fingertips; you can see the estimated mortgage rates you might be offered, based on your current information. So you can get a general feel for the landscape without any heavy lifting.

Once you have these few essentials in hand, you can hand the reigns over to a mortgage broker. They’re the specialists who handle the complex part and turn your groundwork into a personalised deals for you to pick from.

Step 2: Speak to an expert

The next natural step is to have a conversation with a mortgage broker. If you’re looking for expert guidance, Habito’s brokers offer advice at no cost to you. We’ve recently acquired them to bring mortgage expertise in-house.

If you’ve connected your mortgage in Monzo, we can connect you to a Habito expert at a time that works for you. 

Step 3: Review your options

Once you’ve spoken with a broker, they’ll search the market for thousands of deals, doing the hard work for you. They’ll send you up to five of the best matched deals recommended for you. Then you’ll choose which deal is best for you.

At this stage, you’ll decide whether you’d like a product transfer with your current lender, or a remortgage with a different lender. What happens when you remortgage is different to what happens when you do a product transfer. Let’s look at the two scenarios: 

• Scenario A – you choose a product transfer with your current lender

If you’re staying with your current lender, your application will be much simpler. This is because there are usually no new affordability checks (unless you’re borrowing more money) or extra legal work involved.

You’ll be able to secure your new deal faster as completion often takes days or a few weeks.

There may be some fees like a product fee charged by your lender, but there aren’t usually any legal or valuation fees.

• Scenario B – you choose to remortgage with a different lender

If you're remortgaging, your application is more complex as you’re moving your mortgage to a new lender. If you’re using Habito, you see the progress of your application using the status tracking tool in the Monzo app.

Step 4: Submit an application

Once you and your broker have found the best deal, they’ll guide you through the process – letting you know if any documents are needed to submit your application. The application is very similar to the process for your original mortgage.

When you move to a new lender, they’ll usually need to check your affordability, credit history and the current value of your home. 

Step 5: Sort the legal bits

Even if you understand what it means to remortgage your home from a legal perspective, you’ll probably still need a solicitor (a general legal professional) or conveyancer (a legal professional that specialises in property law) to help you switch to your new lender. 

• Scenario A – your new lender provides the legal professional

Some remortgages include a ‘free legals’ package. This is when your lender selects a solicitor or conveyancer for you from one of their partner firms. They’ll reach out to you to get the process moving. One thing to remember is that while your lender covers most or all of the cost of the legal work, the legal process can be slower than appointing your own solicitor or conveyancer.

• Scenario B – you provide the legal professional

If you’d like to use your own solicitor or conveyancer, you can choose a firm you’ve worked with before, one recommended by a mortgage broker, or find a new one yourself. You’ll need to pay their fees directly.

If your mortgage deal includes a cashback incentive, this is a lump sum paid by your lender after your remortgage completes. You’ll receive it once your new mortgage is in place, and you can use it to help cover the cost of your legal fees. The amount and timing of the cashback should be confirmed in your mortgage offer.

Step 6: Get approval and remortgage

If your new lender accepts your application and the legal work is complete (normally in four to eight weeks) then you’ll move over to your new mortgage deal and start making repayments to your new lender.

Is there anything else I need to consider when remortgaging? 

It’s helpful to think about your goals when it comes to remortgaging. Your current deal might not suit your present or future needs, and reviewing your options can be a good way to find lower interest rates and better terms.

Remortgaging can help you with tactical goals, like consolidation of debts or increased cashflow to fund home improvements, up to bigger life goals, like reducing your term and paying off your mortgage sooner. It’s important to speak with a financial advisor or mortgage broker about your goals and the kind of mortgage you might need. Think carefully before securing other debts against your home, as your home may be repossessed if you do not keep up repayments on your mortgage.

Should I start planning now?

If you set a deal reminder when you connect your mortgage to Monzo, we’ll let you know when it’s time to start planning for your remortgage.

Though you won’t be eligible to submit a remortgage application until six months before your current mortgage deal ends, you can start doing your research and considering your options up to 12 months before your deal ends. 

This will give you time to consider the different things that could impact your eligibility to get a more competitive interest rate. Things like:

• Reducing your LTV to unlock improved rates

• Planning ahead for any changes to your monthly repayment value 

• Comparing the lowest deals and fees

• Improving your credit score  

If you’re interested in remortgaging or learning more about your mortgage

We’ve got more articles that can help you – check out this one on the different types of mortgages to get you started. 

Remortgaging usually involves researching your options, speaking to an expert, and completing a few legal steps before switching to your new lender or deal. Starting early can help you secure a better rate and avoid your lender’s higher standard variable rate.

With Monzo, you can connect your mortgage, see estimated rates, and get reminders when it’s time to remortgage. 

Connect your mortgage

You need a Monzo current account to connect your mortgage in the Monzo app. UK residents only. Ts&Cs apply.

Monzo will introduce you to Habito, part of the Monzo group, who will provide you with mortgage advice. They’re a broker so they’ll help you find and arrange the right mortgage, rather than lending you money. If you go ahead, the lender will pay a fee to both Habito and us.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Our address is Monzo Bank, Broadwalk House, 5 Appold St, London EC2A 2AG.

Questions? Answers.

How long does it take to remortgage?

Remortgaging usually takes around 4 to 8 weeks from application to completion. A product transfer with your current lender can be much faster – sometimes just a few days – as it involves less legal work and fewer checks.

Do you need a solicitor to remortgage?

Yes, you’ll usually need a solicitor or conveyancer when switching to a new lender, as they handle the legal transfer of your mortgage. Some lenders include this as part of a ‘free legals’ package, while others offer cashback to help cover your legal fees.

How early can you remortgage?

You can typically start applying for a new deal up to six months before your current mortgage term ends, though it’s smart to start researching and preparing even earlier –  around 12 months before – to give yourself more flexibility and time to compare offers.

Product transfers with your existing lender may have shorter windows, usually of 3-4 months.

Is Monzo a mortgage broker?

No, we’re a regulated bank but you can get fee-free mortgage advice through Habito, who we’ve acquired.

Does Monzo offer mortgages?

We don’t offer our own mortgages, but Habito’s brokers can help you find and apply for them. You can also see your mortgage details directly in the Monzo app. You can see your estimated home value, how much equity you’ve built up, and your current loan to value (LTV) band.