How many times can you remortgage? image

How many times can you remortgage?

Remortgaging has become common practice in recent years as homeowners look to lock in lower interest rates as their fixed rate deal expires. This raises the question: how many times can you remortgage to lock in lower rates?

In this article, we are going to look at this question in more detail. We’ll start by answering the question itself before moving on to specifics, such as 'how soon can you remortgage?', 'how does a remortgage impact your credit score?', 'can you remortgage with the same lender?' and 'how often should you remortgage?'.

How many times can you remortgage?

The short answer is, as many times as you like. There is nothing to stop you from remortgaging every year if you wish, but you shouldn't do it just because you can. Remortgaging can be expensive, especially if you do it before your fixed-rate period has expired, because you may be subject to Early Repayment Charges (ERCs).

That’s why most people only remortgage when their fixed-rate deal has ended. The average mortgage lasts 25 years, and fixed-rate deals are available from 2 to 10 years. So, assuming you negotiate a 5-year fixed-rate deal each time, you can expect to remortgage five times during the length of the mortgage.

Can you remortgage a 30-year fixed-rate mortgage?

With a long-term fixed-rate deal such as this, there is less need to remortgage than borrowers on a 2 to 10-year fixed-rate deal. However, while this type of mortgage is more restrictive, it may still be possible to secure a better rate.

Most providers of long-term fixed-rate deals allow you to break the mortgage every 10 years or so to look for a better deal. The time varies depending on the provider, and there is no obligation for them to provide this option. So, it's wise to ensure the mortgage contract includes a break option before you commit to a long-term fixed-rate deal.

If you find yourself locked into a fixed rate deal without a break option, you can still remortgage, but you may have to pay Early Repayment Charges (ERCs) and exit fees. In some circumstances, this may still prove to be worthwhile, especially if you can secure a significantly lower interest rate.

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How soon can you remortgage?

Most lenders require you to wait for at least six months before remortgaging. This rule was brought in by the Council of Mortgage Lenders (CML) following the financial crisis of 2008.

However, there are exceptions to this rule. For example, if you buy a property with cash or inherit a property from a relative, you may be able to arrange a mortgage on it within six months. Each case is determined on its own merits, however, so it's best to speak to a mortgage advisor before going down this route.

Can contractors benefit from remortgaging too?

Yes, remortgaging is especially useful for contractors because they can use it to their advantage.

Most providers of contractor-friendly mortgages only require 3 months of bank statements to assess your income. That means contractors on a high-paying contract, even if it’s short-term, may be able to increase their borrowing or secure a better rate from a lender.

Depending on the prevailing rate compared to your existing deal, it’s possible to make substantial savings this way. Find out how much you can borrow based on your day rate by completing our online contractors mortgage calculator.

Does remortgaging impact your credit score?

When applying for a remortgage, the lender will need to carry out a hard check on your credit report to verify your identity and evaluate your credit history. This will harm your credit score. For this reason, you should avoid trying to obtain other forms of credit while applying for a remortgage.

The good news is the negative effect won’t last long, as long as you keep up with repayments. Borrowers with a good credit history should have no problem applying for a loan six months or so after remortgaging. This is dependent on individual circumstances, however, so it's wise to check your credit score before applying for a loan.

How long does it take to remortgage?

Remortgaging is a lengthy process, so it’s advisable to allow between 4-8 weeks for the process to be completed. Some lenders are quicker than others, however, online lenders are faster than traditional lenders. So, if you are in a hurry, it is advisable to use an online lender where possible.

Some lenders offer fast-track mortgages that can be arranged in a week or less, but the fees for this type of mortgage can be expensive and the choice of lenders is limited. So, fast-track mortgages are not the best option if you are looking to secure the lowest interest rate.

Can you remortgage with the same lender?

Yes, nothing is stopping you from remortgaging with the same lender. In some cases, it may be beneficial, because they already know you and may offer a reduction in fees to secure your custom.

However, you should bear in mind that remortgaging is about finding the best deal for your circumstances, so you should always choose the lender with the most competitive interest rate. It doesn't matter if they are your existing lender or a different one. Go with the one that offers the best deal for you or you will end up paying more in the long run. Do remember that you may need to factor in any product costs too, however at WIS we would look at this for you and look at the overall cost of the new product compared to your existing mortgage.

How often should you remortgage?

So, we’ve answered the question, 'how many times can you remortgage?', but how often should you remortgage? Unfortunately, there is no finite answer to this question because it depends on personal circumstances.

As a general rule, you should look to remortgage any time your fixed-rate deal comes to an end. It doesn't matter if you are on a 2 or 10-year fixed-rate deal. The time it ends is the time to look at remortgaging to secure another deal.

There may be other times when remortgaging is prudent, such as when you need to raise finance. But these are dependent on your financial history and circumstances, so this should be discussed with a financial advisor or mortgage broker first.

If you would like to know more about how remortgaging works, check out our FREE online remortgage guide.

Get help finding the best remortgage deal

Discover how remortgaging could save you by getting in touch with the mortgage experts at WIS Mortgages today. Our specialist team will evaluate your current mortgage before searching the market to find the best deal for your circumstances. Start the journey today by calling 020 3011 1986 or complete the contact form here to arrange a FREE consultation.

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As a mortgage is secured against your home/property, it may be repossessed if you do not keep up with the mortgage repayments.

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