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If you're considering your financial future, you might have heard about the concept of remortgaging. 

It's often hailed as a key to financial freedom, but how does remortgaging work? 

Let’s break down the ins and outs of remortgaging, so you can understand exactly how it could benefit you.

What is Remortgaging?

Understanding how remortgaging works might sound complicated, but we'll simplify it for you. 

It's about changing your current mortgage to a new one, either with the same lender or a different one. 

It's like upgrading your phone plan to get better features. 

But why would you want to do this? 

Let's explore why people choose to remortgage and how it could benefit you.

Securing a Better Rate

Imagine you took out a mortgage when interest rates were high, but now they've dropped. 

Remortgaging allows you to switch to a new deal with a lower interest rate, which means you could enjoy lower monthly payments and save money over the long term. 

It's like grabbing a discount on your mortgage!

Accessing Equity

As you make mortgage payments over time, you build up equity in your home. 

Remortgaging gives you the chance to tap into that equity by borrowing more money against your property. 

This extra cash could be handy for home improvements, consolidating debt, or covering unexpected expenses. 

It unlocks the value of your home to use for your financial goals.

Changing Terms

Life is full of changes, and your financial situation might evolve too. 

Maybe you've received a salary increase and want to pay off your mortgage faster. 

Or perhaps you're going through a rough patch and need to reduce your monthly payments. 

Remortgaging allows you to adjust the terms of your loan to better fit your current circumstances. It's like customising your mortgage to suit your needs perfectly.

Remortgaging doesn't have to be intimidating. It's simply about switching your mortgage to a new deal that works better for you. 

Whether you're looking to lower your interest rate, access cash from your home equity, or adjust the terms of your loan, remortgaging could be the solution you've been searching for on your path to financial freedom. 

If you're considering remortgaging, remember that it's all about taking control of your finances and making choices that benefit you in the long run.

How Does Remortgaging Work?

Now that we understand why someone might want to remortgage, let's walk through the process:

Assess Your Current Situation

Before diving into the world of remortgaging, take some time to assess your current mortgage. 

What is your outstanding balance? 

What is your current interest rate? 

How much equity do you have in your home? 

Understanding these factors will help you determine whether remortgaging makes sense for you.

Shop Around

Once you've decided to remortgage, it's essential to shop around for the best deal. 

This means researching different lenders and comparing their rates and terms. 

Don't just focus on the interest rate; consider other factors like fees, customer service, and flexibility.

Apply for the New Mortgage

Once you've found a suitable lender and mortgage deal, it's time to apply. 

This will involve filling out an application form and providing documentation to prove your income, assets, and liabilities. 

The lender will then assess your application and decide whether to approve your remortgage.

Valuation and Legal Process

As part of the remortgaging process, your lender will likely conduct a valuation of your property to determine its current market value. 

They will also handle the legal aspects of transferring your mortgage to the new deal.


Once everything is in order, you'll sign the new mortgage documents and the funds will be transferred to pay off your existing mortgage.

What happens in a remortgage process?

When you decide to remortgage, you're essentially swapping your existing mortgage for a new one. 

Let's break down the process into simple steps:


You start by applying for a new mortgage, just like you did when you first bought your home. 

This involves providing financial information and documents to the lender.


The lender will assess your application, considering factors like your credit score, income, and the value of your home.


If your application is approved, the lender will offer you a new mortgage with specific terms, such as the interest rate and repayment period.

Legal Process

There will be some legal paperwork involved, similar to when you first bought your home. 

This ensures that the new mortgage is properly registered and your old mortgage is paid off.


The lender may also require a valuation of your property to ensure it's worth enough to secure the new mortgage.


Once everything is in order, the funds from the new mortgage will be used to pay off your existing mortgage, and you'll start making payments according to the new terms.

Enjoy the Benefits

With your new mortgage in place, you may benefit from lower monthly payments, a better interest rate, or access to cash for other financial needs.

Remortgaging is like hitting the refresh button on your mortgage. 

By going through this process, you could potentially improve your financial situation and get better terms on your home loan.

How does remortgaging release money?

Remortgaging lets you tap into the equity you've built up in your home, which is like a savings account tied to your property's value.

Let's simplify it for better understanding.

Unlocking Equity

Your home's equity is the difference between its value and the remaining balance on your mortgage. 

Remortgaging allows you to borrow against this equity, essentially turning it into cash that you can use for various purposes.

Borrowing More

When you remortgage, you have the option to borrow more than what you currently owe on your mortgage. 

This extra amount is added to your new mortgage, and you receive the difference between your old loan and the new one as cash.

Flexible Options

Whether you want to fund home improvements, pay off debts, or cover other expenses, remortgaging provides a flexible way to access the money tied up in your home.

Interest Considerations

Keep in mind that borrowing more money means you'll have a higher mortgage balance and potentially higher monthly payments. 

It's essential to consider the long-term costs and benefits before deciding to remortgage.

Expert Advice

If you're unsure about whether remortgage is the right move for you, consider seeking advice from a mortgage broker or financial advisor. 

They can help you assess your options and make an informed decision based on your financial goals.

Remortgaging offers a straightforward way to unlock the money tied up in your home's equity. 

By borrowing against this equity, you can access cash for various purposes, providing flexibility and financial opportunities. 

However, it's essential to carefully consider the implications and seek expert advice to ensure it aligns with your long-term financial goals.

What are the risks of remortgage?

It's essential to understand that there are risks involved too. 

Let's take a closer look at some of the potential pitfalls you might encounter when remortgaging.

Increased Interest Payments

If you decide to extend your mortgage term or borrow more money when remortgaging, you might end up paying more interest in the long run. 

This means that even though your monthly payments might be lower initially, you could end up paying more overall over the life of the loan. 

It might feel easier at first, but it could snap back harder later on.

Negative Equity

If the value of your home decreases after you remortgage, you could find yourself in a situation called negative equity. 

This means that you owe more on your mortgage than your home is worth. 

If you need to sell your home in this situation, you might not be able to cover the remaining balance on your mortgage. 

It's like owing more on a loan than the item you bought is worth – not a good situation to be in.

Fees and Charges

Remortgaging often involves fees and charges, such as arrangement fees, valuation fees, and legal fees. 

These costs can add up and eat into any potential savings you might make by remortgaging. 

It's essential to factor in these expenses when considering whether remortgaging is worth it for you. 

It's like buying something on sale but then having to pay extra for shipping and handling – it might not be as good a deal as it first seems.

While remortgaging can offer benefits like lower payments and access to cash, it's crucial to be aware of the risks involved. 

Weighing the potential risks against the benefits can make an informed decision that's right for your financial situation.

Secure Your Financial Future

Remortgaging presents a valuable opportunity to enhance your financial situation. 

Whether you aim to reduce monthly payments, access funds for home improvements, or adjust loan terms, remortgaging could be the solution you need. 

Comprehending the process and exploring your options can pave the way to greater financial stability. 

Interested in exploring your remortgaging options and securing your financial future? 

Reach out to RM Financial Consultants Ltd today for expert guidance on mortgage solutions, life insurance, critical illness cover, income protection, and home insurance. 

Start your financial freedom now!

Information was accurate at time of publication.
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