A simples guide

Re-mortgaging 101

You may have heard the term ‘re-mortgage’ before, but what does it mean? In this article, we will be giving you all of the information you need to know about what re-mortgaging is and how it can affect you.


Before we begin, it’s important to point out that re-mortgaging isn’t suitable for everybody. Hopefully, after you’ve read this guide to re-mortgaging, you’ll know precisely whether or not negotiating a re-mortgage deal may help your finances.


What is a re-mortgage?

Put simply; a re-mortgage is the act of taking out another mortgage (not an additional second mortgage) against a property that you own. You can do this with your current lender or you might go with a different lender altogether. There are three reasons why you might want to consider shopping around for re-mortgage rates:

- To save money on your mortgage

- To get a mortgage more suited to your needs

- To raise money against your home.

Everyone’s reasons for re-mortgaging are all very different, and so are the elements within it that people should ponder before they go through the re-mortgage process. Around a third of all UK home loans are re-mortgages. Still, it’s never a decision that should be made without careful consideration. So think long and hard before you decide whether it’s the right choice for you.

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What are the benefits of re-mortgaging?

As we mentioned above, there are three common benefits that people can reap from re-mortgaging. Before we discuss those in more detail, there is something we want to point out. A mortgage is possibly the largest financial commitment you will ever make; before changing mortgage providers, make sure you fully understand the new terms you will be entering and all of the re-mortgage rates involved.

The first, and most common reason, for re-mortgaging is usually to save money. Perhaps you feel you can get a better rate, or maybe the fixed rate term on your current mortgage is coming to an end. There are other reasons too, but the main point is that you can save money by looking for the best value re-mortgage deals.

The second reason in our list seems confusing because at the time you took out the original mortgage, it suited your needs but now it doesn’t.  For example, maybe you had bad credit when you took out your original mortgage, meaning that you’re paying more interest now than you need to. Perhaps you’ve had a pay rise and would like to pay a higher amount off the mortgage but your current lender will not let you without a charge. In any case, you might need to consider comparing re-mortgage options to find the mortgage that is right for you and your family’s current needs.

The final point in our list mentions the need to raise money against your home. Please don’t forget the repeated warnings we gave earlier regarding re-mortgaging. This reason for re-mortgaging is why those warnings are in place as mortgage holders need to be very careful about borrowing money against their home. While it can certainly help in a pinch, it can also lead to much deeper financial issues. Failure to pay after lending against your home could lead to your home being repossessed.

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Can you re-mortgage with a bad credit rating?

While re-mortgaging is possible with a bad credit rating, it’s not always advised. If your credit score has gotten worse since you took out your original mortgage, then you may not be offered a better rate when you re-mortgage. If this is the case, it’s worth sticking with your current lender until you have worked through your credit issues.

How to get the best re-mortgage deals

You can ensure that you get the very best value re-mortgage rates by visiting our website and using our quick and simple comparison service to search through our panel of top mortgage providers. You could be just a few clicks away from some major savings!


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