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Can you remortgage early? How early can your remortgage? Can you remortgage early on a fixed rate? Can you remortgage early with the same lender?
These are all common questions.
While it is usually possible to remortgage as early as you want to, there’s some considerations to think about before proceeding.
Let’s run through these considerations in this guide.
Can you remortgage early?
In short, the answer is typically yes, providing that you pass affordability and credit checks for the remortgage.
Can you remortgage early on a fixed rate?
The same answer applies.
So, what’s the downside?
Well, we find that the main stumbling block tends to be early repayment charges.
Depending on the mortgage product you currently have, there may be early repayment charges to pay if you exit your current deal early. These are more common with fixed rate mortgages but can also apply to variable rate mortgages.
What does this mean?
Well, it could mean that the cost of remortgaging is much higher when taking this charge into account.
For example, if your mortgage balance is £400,000 and your particular mortgage product has an early repayment charge of 3%, your early repayment charge would be £12,000!
Another thing to consider is the associated fees of remortgaging.
What I mean by this is that there could be various other fees to account for, such as mortgage arrangement fees, valuation fees, broker fees and solicitor fees.
When remortgaging, it’s important to take all costs into consideration before making a decision.
At Rosehill, we take pride in building long-term relationships with our clients. We don’t see ourselves as just a mortgage broker, but rather a trusted partner who will be with you every step of the way.
At Rosehill, we take pride in building long-term relationships with our clients. We don’t see ourselves as just a mortgage broker, but rather a trusted partner who will be with you every step of the way.
Firstly, to break down some mortgage jargon for you, a refinance with your current lender would usually be referred to in the world of mortgages as a ‘rate switch’ or ‘product transfer’.
While the rate switch process can be simpler, as there’s typically no underwriting, credit checks or solicitors involved, the other considerations above still apply.
If there’s an early repayment charge applicable to your current mortgage product, the process can become very expensive, and although there might not be any solicitor fees with a rate switch, there may still be other associated fees such as an arrangement fee to pay.
I would personally class anything beyond 6 months in advance to be ‘early’.
If your current mortgage rate is due to expire within the next six months, I would not deem this to be early at all. In fact, in this instance, I would encourage you to look into your remortgage options now.
If your current mortgage rate is due to expire in over six months, then the considerations mentioned should be taken into account. We would firstly try to understand the reason for an early remortgage, particularly if there are early repayment charges payable, before looking into suitable options.
Everyone’s situation is different, so there’s no ‘one size fits all’ answer here.
Essentially, there needs to be a specific reason why you are looking to remortgage early to determine whether it’s worth it, especially if there are early repayment charges.
One example of when it may be worth it could be if interest rates have reduced significantly since you arranged your current mortgage, whereby the saving available outweighs any early repayment charges.
Another example may be that you have carried out home improvements that has increased the value of your home, which may make you eligible for a more cost-effective remortgage option, even when taking any early repayment charges into account.
Overall, while it’s possible to remortgage early, whether it’s worth it comes down to your specific circumstances.
We focus on building long-lasting relationships with clients.
We therefore charge a reduced fee for our existing client remortgages.
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As a mortgage is secured against your home or property, it may be repossessed if you do not keep up the mortgage repayments. Think carefully before securing any other debts against your home or property. The Financial Conduct Authority does not regulate commercial buy to lets and some forms of commercial mortgages. You may have to pay an early repayment charge to your existing lender if you re-mortgage
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