Remortgage

Never pay more than you need to

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We make it easy for you to switch rates and save money

A mortgage may usually be for a 25-year period but it doesn’t have to be for life! We can review your mortgage arrangements to ensure that you never pay more than you need to. A remortgage is also a good way to free up funds to carry out home improvements, buy another property, or just make sure your mortgage is still right for your current situation. Your Caenstone advisor will talk you through all the options available to you.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Our step by step guide on
how it all works

Start
Contact your mortgage broker

We can start discussing your plans and mortgage options 6 months before your current deal expires.

Getting the wheels in motion early allows us to secure you the most suitable deal and also gives us enough time to review the market until your current deal expires.

Step 1
Find out how much you can borrow

Put bluntly, it depends on what you can afford.

That’s why we start with a review of your current finances and take into account any change to circumstances since you last took out a mortgage. We’ll also take into account any change to the value of your property and talk you through any associated costs of remortgaging.

Step 2
Apply for your mortgage

We will look at what deals your current lender is offering and compare with the rest of the market to make sure you’re getting the most suitable deal for you.

Once we’ve discussed all options and you’ve made a decision we can start the application process. We’ll let you know what documents you’ll need to get together.

Step 3
Get a valuation

As part of the application process, the mortgage lender will carry out a new valuation of the property.

This may be in the form of a valuer visiting your property, or may take place online. Most lenders will cover the cost of this.

Step 4
Receive a mortgage offer

Once everything checks out, your lender will issue your formal mortgage offer.

This will be valid for 3-6 months.

Step 5
Legal work

If we’re changing lenders then there will be legal work to be carried out. Most lenders will cover the cost of this.

Step 6
Completion

Once we have the mortgage offer and legal work is ready, we can then set completion to coincide with your current mortgage deal expiring.

Step 7
Complete

Helping to find you the right mortgage

We deal with a wide network of lenders offering some of the best mortgages on the market

Talk to an expert advisor today
020 3909 9585

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Commonly asked questions

What is ‘loan to value’ or LTV?

Loan to value (LTV) is the ratio of mortgage to property value expressed as a percentage. For example, if you purchase a property at £500k with a £50k deposit (10%), you will need a 90% LTV mortgage.

Typically the lower the LTV the better the rate of interest a lender will offer because a high LTV mortgage represents more of a risk to the lender. In terms of LTV, most mortgage rates fall within the 60% to 95% range.

Can a mortgage be transferred to another property (porting)?

Yes, if the product is ‘portable’. What actually happens is that you repay your existing mortgage when you sell and then resume it at the same rate of interest to purchase the new property. You have to re-apply and meet current affordability rules, and any changes to your circumstances could affect the decision to lend.

If you move to a more expensive property and need to borrow more, the extra amount will be in the form of a new mortgage; and that could mean another arrangement fee and differing product end dates.

Before committing to selling your property and buying a new one, you should look into whether you qualify to port your mortgage and whether that’s a better option for you than applying for a brand new mortgage (with all the fees that involves). Remember, just because you can doesn’t always mean you should.

Why use a mortgage broker?

A mortgage broker will have access to a wide range of lenders and will help you choose the most suitable mortgage for your situation.

It is our job to make the process as hassle-free as possible. We liaise with the lender and your solicitor, complete the paperwork, and are available to guide you through the specifics and answer any questions that arise.

How is ‘new build’ classified?

Different lenders have varying criteria as to which properties are defined as ‘new build’. A common definition is a property that has been built, converted or refurbished within the last two years;  often including properties that have not been occupied since being built.

It can often be more restrictive to secure a mortgage on a new build property. However, most lenders are prepared to lend at a higher loan to value rate (LTV) on a new build house than on a new build flat.

What is the maximum age I can take out a mortgage?

There is no blanket maximum age for applying for a mortgage – most lenders have their own age limits.

Usually, the maximum age at the end of the mortgage term is 75 or your intended retirement age, whichever is sooner. It’s not impossible to get a loan that goes beyond this age limit, but most options require you to provide proof that you can repay the mortgage when it extends into your retirement.

Some lenders will lend to clients up to age 80, using salaried earnings. And some will lend beyond that upon proof of a pension that can cover payments at 80+.

What type of mortgage should I choose (fixed vs. variable)?

It depends on what type of mortgage suits your circumstances and plans best.

Fixed

As it says on ‘the tin’, your rate of interest is fixed or guaranteed not to change for a defined period (typically 2, 3, 5 or 10 years) regardless of changes to the Bank of England base rate. This type of mortgage gives you certainty, allowing you to budget effectively. They usually carry an early repayment penalty so it’s important to consider how long you wish to fix for (see the info on ‘porting’). The longer the fixed period, the higher the interest rate is likely to be; effectively paying for protection against any market rate changes.

Variable

The interest rate on a variable mortgage moves up and down, usually in response to the UK economy. An advantage of this type of mortgage product is that it’s often more flexible, with lower or no exit fees.

Variable mortgages fall into three categories: tracker, standard variable, and discounts.

Tracker – The rate tracks an economic indicator, most commonly the Bank of England base rate or LIBOR. It will be pegged above the indicator it is tied to by a fixed margin for the product term, typically two years or for the lifetime of the loan.

Standard variable rate – This is the rate you will typically move onto after finishing an initial structured rate. Each lender manages their own SVR, often following the Bank of England base rate but not necessarily. They can range from 2% to 5+%. There are no exit penalties for an SVR mortgage.

Discount – These products offer a discount against a lender’s standard variable rate for a defined period, typically two or three years. However, there is no guarantee that a lender will move their SVR down if the BBR rate goes down. Discount rates often don’t carry exit penalties.

Can I borrow on an interest-only basis?

Yes.

However, certain conditions would have to be met (especially relating to how you plan to pay off the loan at the end of the mortgage term, the mortgage size, level of deposit, etc.) and these can differ from lender to lender.

These kinds of conditions can make a big difference to how much you can borrow and under what conditions – it’s important to discuss these options early with your mortgage broker.

What happens if I want to move house in the middle of my mortgage deal?

If the mortgage product is ‘fixed’ there will likely be penalties if the mortgage is redeemed early.

If the mortgage contract has no exit penalties, the mortgage can be redeemed and a new application can be made on the new property.

If the current mortgage is ‘portable’ you can redeem the existing mortgage when the property is sold and resume the mortgage on the same terms on the purchase property. Any further borrowing required (e.g. the new property may be more expensive than the old) would be taken out with the same lender and the rate would be calculated on the overall loan to value.

What’s the difference between capital repayment and interest-only?

These are the two main ways to repay your mortgage. With capital repayment, each month you are paying off a portion of the loan, the amount you borrowed, so that by the end of the mortgage term, you’ve paid it all.

With interest-only repayment, you’re just paying back the loan interest each month. The monthly payments are lower but you will need to have an acceptable repayment strategy. This maybe investments, equity in a property, lump-sum payments or even selling the property and downsizing.

Why should I remortgage?

There are a number of reasons you might want to remortgage…

Your current deal is due to expire

If you have a fixed-rate mortgage or some other kind of ‘reduced-rate’ deal, when that deal expires, you’ll automatically move to the lender’s standard variable rate. It’s likely there are better deals available to you.

You want to borrow more

You may want to carry out some home improvements, buy another property, or even a new car. Depending on what you want the money for and whether your current finances allow, you may be able to switch deal and borrow more than your current mortgage.

You want a better deal

Your current deal may no longer be competitive – there are now better deals available. However, you might have an early repayment charge (ERC) on your current mortgage which means that although there are better deals or lower interest rates on the market, changing deals isn’t the best option as the savings are outweighed by the ERC. It’s important to get the right advice when looking at the costs in changing, as well as the savings you’ll make.

Your property has increased in value

Your home improvements may have increased the value of your property or the property market might have moved in your favour, putting you in a different loan to value bracket and giving you access to more favourable deals.

You want a more flexible mortgage

You may want to be able to make overpayments when you have some spare cash or even link your savings to your mortgage account with an offset mortgage.

When should I look at remortgaging?

We would suggest you don’t leave it to the last minute. We can start discussing your plans and mortgage options six months before your current deal expires. Getting the wheels in motion early allows us to secure you the most suitable deal and also gives us enough time to properly review the market before your current deal expires.

What is product transfer?

When your existing deal ends, then your current lender may offer you a new deal rather than their standard variable rate. We’ll take this into account when assessing your options.

Do I need to arrange a solicitor/conveyancer?

If you change lenders then there will be legal work that needs to be carried out in order to remove the legal charge of the existing lender and to register the new lender. Most lenders will either cover the cost of this if they appoint the solicitor or will offer you the option of selecting your own solicitor and they will give you cash back towards the cost.

Should I consolidate unsecured debt?

Most lenders allow you to consolidate unsecured debt such as credit cards, loans, etc. as part of your new mortgage, but it’s rarely the best thing to do. Firstly, you’re securing the debt against your property which could put your home at risk if things go wrong. Secondly, even if the interest rate on the mortgage is lower, you’re likely to end up paying more in the long run as you’ll be paying interest over a longer period of time.

How much will remortgaging cost?

It’s important to take into account the associated fees which may apply when remortgaging. The main fees are:

Early Repayment Charge (ERC)

If you’re still in the initial rate period of your current mortgage, then your existing lender may apply an early repayment charge when you pay off the mortgage early. It’s important to check as an ERC could mean that it’s not cost-effective to change deals just yet.

Arrangement fee

Whether you stay with your current lender or change lender for a better deal, then you may have to pay an arrangement fee in order to get the best deal. Lenders will usually offer you their lowest rate which will come with their highest fee, whereas a higher rate usually comes with a lower fee. We’ll calculate which works best for you based on the size of your mortgage.

Valuation fee

If you change lenders then the new lender will want to value the property. In most remortgage deals, the new lender will cover this cost.

Legal fees

When changing lenders there is legal work to be done in order to remove the legal charge of the existing lender and to register the new lender. Most lenders will cover the cost of this.

What is a second charge mortgage?

If you take out a second loan secured on your home, that’s a second charge mortgage.

It’s important that you first speak to your existing lender. They may be willing to lend you the money on more favourable terms rather than taking out a second charge mortgage. If your current lender is not willing to lend you the extra and you have an early repayment charge on your existing mortgage which makes it prohibitive to remortgage to another lender, then a second charge mortgage may be the best option.

Second charge mortgages tend to be offered by specialist lenders, and the rates and fees are often more expensive than first charge mortgages.

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Important Information

Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. The typical fee that we charge is £250. We may charge a higher fee for more complex cases. Caenstone is an appointed representative of Openwork Limited, which is authorised and regulated by the Financial Conduct Authority. Caenstone, 40 Bank Street, London, E14 5NR.