Remortgaging means moving your mortgage from one lender to another whilst staying in the same home. You take on a new mortgage with your new lender and this replaces the one with the existing lender.
There are many reasons why you may want to move your mortgage to us including to reduce your mortgage payments, borrow more money or you may have a change in circumstances.
To reduce your mortgage payments
You may have taken out a mortgage a few years ago and be paying a higher rate of interest than one that we’re offering. Or you're on a variable rate which you’d like to swap for a fixed rate so that you can budget more efficiently. Finding a lower rate of interest when you remortgage, means that your monthly payments will be lower.
To borrow more money
You may want to make home improvements as a cheaper alternative to moving home. Borrowing more money through a new mortgage allows you to do this by releasing some of the equity in your home. Remember though, that increasing the size of your mortgage may mean larger monthly payments.
Change in circumstances
Any change in your circumstances could lead to different mortgage requirements. You may have suddenly come into some money and want to pay off some of your mortgage or reduce your mortgage term.
You may have an interest only mortgage and feel that your investment vehicle isn't going to cover your mortgage and so need to change to a repayment mortgage.
If you’re thinking about remortgaging, comparing all the financial details and thinking about the costs that remortgaging might include should help you get to the right decision.
Your existing mortgage
Could your current lender offer you a better deal? It’s worth getting in touch them to find out a bit more about your mortgage and any alternatives they might be able to offer. Whether you decide to take a new deal with your current lender or you want to remortgage to us, you’ll need to know if you have to pay an early repayment charge and exit fee. You’ll also need to get a ‘redemption quote’ which will tell you how much you still owe on your existing mortgage.
Potential costs
There will be some costs you need to consider when remortgaging.
Early repayment charge
If your current mortgage is tied into a deal, you may have to pay an early repayment charge to get out of that deal. It’s normally a percentage of your mortgage balance and will be detailed in your mortgage offer. If you can’t find it, just contact your current lender and they’ll be able to tell you how much it will be.
Product fee
We offer a range of mortgages which have no product fee.
Mortgages with a product fee usually have a lower interest rate during the initial rate period. It can be added to your mortgage, but it means you pay interest on the product fee unless it’s repaid within 21 days of completing on your mortgage.
Valuation
Most of our mortgages offer a free standard valuation. It makes sure the property is worth the amount you stated in your application.
Legal/conveyancer fees
You need a solicitor/conveyancer to help with the legal aspects of remortgaging. On most of our mortgages we’ll pay your standard legal fees.
Account fee
The account fee is charged by us for providing and administering your mortgage. It’s payable on completion, however you can defer this fee until the end of your mortgage.
As you already have a mortgage on your home, you’ll be used to budgeting for different household costs such as utility bills, shopping and insurances. We look at how much you earn, what regular payments you make and your day-to-day living expenses.
How much do you spend each month?
You can use our handy budget calculator to help you work out how much you spend each month.
How much could you borrow?
You must be a UK resident to apply for a mortgage. When we’re checking to see if you’re eligible we look at things like:
- Is the amount you earn enough to make payments on the amount you want to borrow?
- Are you able to provide confirmation of your income?
- How much outstanding debt do you have?
- How much do you want to borrow compared to the value of your home? (This is known as the Loan to Value ratio or LTV)
- How good is your credit rating?
- Have you ever missed payments on any credit commitments?
- Do you have any County Court Judgements or Individual Voluntary Arrangements (IVAs)?
- Have you ever been bankrupt?
- Do you want to borrow on an interest only basis?
Use our 'How much could I borrow?' calculator to get an idea of how much you could borrow, based on your earnings and spend each month. It can then show you how much your monthly mortgage payments might be for the mortgages we offer.
Credit ratings
Another important part of being able to apply for a mortgage is having a good credit rating. All lenders use a credit reference agency to see how people have managed their money in the past.
There are a few ways to improve your credit rating:
- Check your credit file. There are three main credit reference agencies: Experian, Equifax and TransUnion. You can ask them for a copy of your credit file so that you can check its accuracy. Contact the agency if you see any wrong details so that they can correct them for you.
- Register to vote – you may find it more difficult to get credit if you’re not on the electoral role.
- Cancel any unused credit cards or bank accounts. Unused credit cards can push up the amount of available credit you could have and it can reduce your credit score.
- Keep your credit card and loan debts as low as you can.
- Never miss or be late for payments – this will reduce your credit score.
If you decide to remortgage, make sure you’re getting the deal that suits you best.
Do you want to pay the same each month?
A fixed rate mortgage gives you the peace of mind that comes from knowing exactly what your payments will be each month during the ‘initial rate period’
Do you want to track the Bank of England base rate?
A tracker rate mortgage tracks above the Bank of England base rate during the ‘initial rate period’, or for the life of your mortgage if you take a Lifetime Tracker mortgage. Your payments will increase or decrease in line with changes to the base rate.
Santander mortgages
The table below shows the different types of mortgages we offer, and how they work.
Fixed rate mortgages | Tracker rate mortgage | Lifetime Tracker mortgages | |
|---|---|---|---|
Tracks the Bank of England base rate | No | Yes | Yes |
Fixed monthly payments | Yes | No | No |
Initial rate period | From two years | Two years | For the lifetime of the mortgage term |
Interest rate changes to our Standard Variable Rate after the initial rate period | Yes | Yes | No |
Unlimited overpayments | Up to 10% of the balance per calendar year | Yes | Yes |
Early repayment charge | Yes1 | No | No |
1If you choose to repay your fixed rate loan amount in full or overpay by more than 10% each calendar year, you'll need to pay an early repayment charge.
Repaying your mortgage
A mortgage has two parts. The original amount borrowed to buy the property, sometimes known as the ‘capital’, and the additional amount the lender charges for lending you the capital, otherwise known as the ‘interest’.
When you take out a mortgage you choose how you would like to repay it. You can take out:
- a repayment mortgage (sometimes called ‘capital and interest’) - your mortgage payment covers the interest and helps to reduce the amount you owe (‘the capital’). As long as you keep up your payments, you can be sure your whole mortgage will be paid off at the end of the mortgage term.
- an interest only mortgage - your mortgage payment only covers the interest on what you owe. At the end of the mortgage you pay off the amount you’ve borrowed using savings or investments built up during the mortgage period. If you take out an interest only mortgage you must be sure that you’ll have enough money to repay the mortgage at the end of the term.
- a combination of the two.
Online
You’ll need to get an instant decision in principle first. This tells you if we could lend you the amount you need based on your monthly income and outgoings. It’s free with no obligation and is valid for 60 days. Plus it’s only a soft credit check which means that it won’t affect your credit rating.
You can then apply for a mortgage online. You need to be comfortable choosing your mortgage without receiving advice from us.
You’ll be able to see the mortgages you’re eligible for with their monthly payments and any associated fees. Once you’ve chosen your mortgage deal, you can get a mortgage illustration which essentially is a quote that shows the costs and fees for the mortgage.
You don’t have to complete your application in one go. Simply save and come back to it when you’re ready. Once you’ve finished, you’ll get an instant decision. This is subject to checking any documents we ask for and a satisfactory property valuation.
By phone
We’ll firstly give you a decision in principle based on your monthly income and outgoings. This tells you if we could lend you the amount you need.
Your Mortgage Adviser will ask you questions about your needs and circumstances so that they can confirm that the mortgage is affordable and advise you on the right mortgage. They’ll also take some details about the property and your solicitor.
Next, they’ll give you a mortgage illustration for the mortgage deal, which is essentially a quote that shows the costs and fees for the mortgage.
Key documents
Having your key documents to hand when you’re applying will make the process smoother:
- Your last three years’ address history, with no gaps.
- Your last three months’ payslips or last three years’ accounts/ SA302s and Tax Year Overviews if you’re self-employed.
- Your last three months’ bank statements.
- Full details of any loan or credit cards you have.
- ID such as driver’s licence or passport.
Valuation
Once we’ve completed your mortgage application, we’ll arrange for the property to be valued. This valuation is for our purposes, and it makes sure there’s enough equity in the property to support the loan being asked for.
If the property is leasehold, we’ll need extra details about the ground rent and service charges as part of your application.
We may ask for additional reports to be provided if the valuer feels they’re necessary. For example, if the valuer has noticed cracking, damp or similar issues, these may need to be investigated before we can make a decision on your application.
For all applications the property must be habitable with a working kitchen and bathroom (as a minimum) before any money will be released.
Once we’ve received a satisfactory valuation and any additional reports, we can make you a formal mortgage offer, meaning your mortgage has been approved.
When we’ve received the valuation we can make you a formal mortgage offer, meaning your mortgage has been approved.
Completion
Finally we’ll instruct the solicitor to transfer the mortgage from your existing lender to us. If you borrow more money at the same time, the solicitor will arrange to pay that directly to you on completion.
Insurance
You’ll already have insurance to protect your home, but it’s worth reviewing it to see if it’s still adequate. Santander customers can get discounts on insurance so remember to check our latest offers