Remortgage rates: what you need to know before you switch

Remortgage rates are the interest rates lenders offer when you switch your existing mortgage onto a new deal, either with your current lender or a different one. They move constantly, driven by swap rates, the Bank of England base rate, and each lender's own appetite for new business, so the rate available today can look quite different in a few months.

There's no single rate available to everyone. What you're offered depends on factors like your loan-to-value, credit history and income, which is why two people with similar mortgage balances can end up with different deals. An advisor who compares a wide range of lenders can show you where you're likely to land before you commit to a formal application.

Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

For a wider look at the remortgaging process from start to finish, read our remortgage overview.

Two borrowers with identical mortgage balances can be offered noticeably different remortgage deals. Lenders price each application individually, weighing up several factors before deciding what to offer.

If your credit history is affecting the deals you're seeing, our guide on how to remortgage with bad credit covers the specialist options available.

Choosing between a fixed and tracker remortgage rate comes down to how much certainty you want, and how comfortable you are with your payments moving if the Bank of England base rate changes.

A fixed rate locks your payment for the deal term, which suits homeowners who want to budget with confidence. A tracker rate moves in line with the base rate, so it can fall as well as rise; if the base rate increases, so will your monthly payment. Some lenders also offer discount variable deals, priced at a set reduction to their own standard variable rate rather than the base rate.

If you're worried about keeping up with higher payments should your rate rise, impartial guidance is available from MoneyHelper (0800 138 7777).

There's no universally right answer. If protecting your budget from surprises matters more to you than chasing a potentially lower short-term rate, a fixed deal is usually the safer choice. If you can absorb some payment movement and think rates may fall, a tracker could work out cheaper, though this isn't guaranteed.

Loan-to-value, or LTV, is one of the biggest drivers of remortgage rates. It's simply your outstanding mortgage balance expressed as a percentage of your property's current value; the lower the percentage, the more equity you have, and the more competitive your rate tier tends to be.

If your property's value has fallen since you last remortgaged, you might find yourself pushed into a higher LTV band than expected, even if you've kept up with every payment. Getting an up-to-date valuation before you apply avoids an unwelcome surprise partway through the process.

Making an overpayment, if your current deal allows it, can be enough to move you from one band to a cheaper one. For example, paying down an extra £2,000 on a £200,000 balance shifts your LTV by less than a percentage point on its own, but combined with a modest rise in your property's value, it can be enough to tip you into a lower band.

When your current deal ends, you have two main routes: a product transfer, where you move onto a new rate with your existing lender, or a full remortgage, where you switch to a different lender entirely.

Product transfer

Your existing lender offers you a new rate directly, usually without a new valuation, affordability re-check or legal fees. It's typically the fastest option, but you're only seeing one lender's offer.

Full remortgage

You compare a wide range of lenders across the market, which can uncover a better remortgage rate than your existing lender's retention offer, particularly if your circumstances or property value have improved. It usually involves legal work and can take longer to complete.

An advisor can check your existing lender's retention rate against the wider market on the same day, so you can see whether switching is worth the extra time and cost before you decide.

If you're looking to borrow more without remortgaging your whole balance, consider secured loans as an alternative. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it, so weigh this option carefully against a further advance or full remortgage.

Some homeowners use a full remortgage to consolidate other borrowing into one payment; our guide to debt consolidation remortgage explains how this works and what to weigh up. If you're remortgaging a rental property rather than your home, see our dedicated guide to buy-to-let remortgage rates and criteria instead.

Timing your remortgage well can protect you from slipping onto your lender's standard variable rate, which is usually far more expensive than any deal arranged in advance. Most homeowners start comparing remortgage rates around six months before their current deal ends.

If you're considering remortgaging before your current deal ends, check your existing mortgage offer for an early repayment charge (ERC). This is usually a percentage of your outstanding balance and tends to reduce the closer you get to the end of your deal, so it's worth weighing the ERC against the potential benefit of switching early.

An advisor who compares a wide range of lenders can access remortgage rates and product criteria that don't always appear on comparison websites, including some specialist and exclusive deals only available through intermediaries.

• Compare a wide range of lenders in one conversation, rather than researching each one separately
• Get support if your circumstances are more complex, such as being self-employed or having a recent change in income
• Have your application packaged and submitted correctly the first time, reducing the risk of a rejection that could affect your credit score

You can check any broker's authorisation on the Financial Conduct Authority register before you get started.