How Remortgaging Can Save You Money

How Remortgaging Can Save You Money

Remortgaging can save money, but only if the new deal is genuinely better once rates, fees, timing, early repayment charges and your future plans are included.

For many homeowners, the biggest mistake is doing nothing when a fixed, tracker or discount mortgage deal ends.

If you take no action, you may move onto your lender’s standard variable rate.

That can be more expensive than arranging a new deal.

But remortgaging is not always about chasing the lowest headline interest rate.

A good remortgage review looks at the full cost, not just the monthly payment.

👉 Find out how much money remortgaging could save you.

What does remortgaging actually mean?

Remortgaging means changing the mortgage deal on a property you already own.

This can usually happen in two ways:

• switching to a new deal with your current lender
• moving your mortgage to a different lender

Switching to a new deal with the same lender is often called a product transfer.

Moving to a new lender is usually called a remortgage.

In everyday language, people often use “remortgage” to describe both.

The aim is usually to get a better deal, avoid a poor rate, borrow more, change mortgage type, reduce monthly payments or make the mortgage fit your current circumstances.

For more detail, read what is remortgaging and how does it work?

How can remortgaging save money?

Remortgaging may save money by helping you:

• avoid your lender’s standard variable rate
• secure a better interest rate
• move into a better loan-to-value band
• reduce monthly payments
• reduce total interest
• switch to a more suitable product
• avoid unnecessary fees
• compare product transfer and new lender options
• time your next deal properly
• stop drifting onto an expensive rate by accident

The saving depends on the numbers.

A remortgage that saves one homeowner money may not be right for another.

The biggest saving: avoiding the standard variable rate

The most common remortgage saving comes from avoiding the lender’s standard variable rate.

When your fixed, tracker or discount deal ends, you will usually move onto the lender’s standard variable rate unless you arrange a new deal.

The standard variable rate, or SVR, is often higher than the rates available on new fixed or tracker deals.

It can also change at the lender’s discretion.

This means doing nothing can be expensive.

A homeowner may not notice immediately, but the monthly payment can rise sharply once the old deal ends.

For more detail, read what happens at the end of a fixed-rate mortgage?

Why sitting on SVR can cost more

Sitting on SVR can cost more because the rate may be higher than other available options.

This can lead to:

• higher monthly payments
• more interest paid
• less money reducing the mortgage balance
• household budget pressure
• missed opportunities to fix or switch
• delayed financial planning

Some homeowners stay on SVR temporarily because they need flexibility, expect to move soon, or are waiting for a better time to switch.

That can be sensible in some cases.

But staying on SVR by accident is different.

That is where money can be wasted.

Saving money through a better interest rate

A lower interest rate can reduce monthly payments and total interest.

For example, if you move from a higher rate to a lower rate, your monthly payment may fall.

But the rate is only part of the calculation.

You also need to include:

• product fee
• valuation fee
• legal fee
• broker fee
• exit fee
• early repayment charge
• cashback
• overpayment rules
• deal length
• flexibility
• total cost over the deal period

A lower headline rate is not always cheaper overall if the fees are high.

For more detail, read what fees are involved in getting a mortgage?

A simple remortgage saving example

Imagine a homeowner is about to move onto SVR.

Their current lender’s SVR would make the payment £1,450 per month.

A new deal could reduce the payment to £1,150 per month.

That is a possible monthly saving of:

£1,450 - £1,150 = £300 per month

Over a year, that could mean:

£300 × 12 = £3,600

But this example is only useful if fees, charges and timing do not wipe out the saving.

The full calculation matters.

Improved loan-to-value can unlock better deals

Remortgaging can also save money if your loan-to-value has improved.

Loan-to-value, or LTV, compares your mortgage balance with your property value.

Your LTV may improve if:

• your mortgage balance has reduced
• your property value has increased
• you have made overpayments
• you have not borrowed more
• you have built more equity

A better LTV can sometimes open access to lower rates or more lender options.

For example, moving from 90% LTV to 85%, or from 85% to 75%, may improve the deals available.

For more detail, read what is loan-to-value LTV and why it matters.

Why LTV bands matter

Mortgage lenders often price deals in LTV bands.

A borrower with a lower LTV may be seen as lower risk.

That can mean better rates or wider product choice.

For example:

Property value: £300,000 Mortgage:       £240,000 LTV:            80%

If the mortgage balance falls and the property value rises, the LTV may improve.

That could make the next remortgage cheaper.

This is why property value and mortgage balance should both be checked before choosing a new deal.

Remortgaging to reduce monthly payments

Many homeowners remortgage to reduce monthly payments.

This may be done by:

• securing a lower interest rate
• extending the mortgage term
• moving to a different product
• changing repayment structure
• consolidating commitments in some cases
• choosing a more suitable lender

Reducing monthly payments can help cash flow.

But it is important to understand the long-term cost.

A lower monthly payment does not always mean a cheaper mortgage overall.

Extending the term to reduce payments

Extending the mortgage term can reduce monthly payments because the debt is spread over a longer period.

This may help if affordability is tight.

For example, extending from 20 years to 30 years may reduce the monthly payment.

But it can also increase the total interest paid over the life of the mortgage.

This can still be a sensible short-term strategy for some households, but it should be a deliberate decision.

For more detail, read how long should your mortgage term be?

Remortgaging to reduce total interest

Saving money is not always about lowering the monthly payment.

Sometimes the goal is to reduce total interest.

You may be able to do this by:

• securing a lower rate
• shortening the mortgage term
• keeping payments the same after getting a lower rate
• making overpayments
• avoiding unnecessary fees
• switching away from SVR
• improving LTV
• choosing a better product

A homeowner whose income has increased may decide to keep payments higher and clear the mortgage faster.

That can reduce total interest, but it needs to remain affordable.

For more detail, read mortgage overpayments: are they worth it?

Product transfer vs full remortgage

When trying to save money, you usually need to compare two routes.

The first is a product transfer.

The second is a remortgage to a new lender.

A product transfer means staying with your current lender and switching to a new deal.

A full remortgage usually means moving to a different lender.

Both can save money.

The better option depends on your circumstances.

When a product transfer may save money

A product transfer may be useful if:

• your current lender offers a competitive deal
• you want a simpler process
• you want to avoid full legal work
• affordability is tighter than before
• income has fallen
• credit history has worsened
• you do not need extra borrowing
• you want speed
• you want fewer checks in some cases

A product transfer may not always be the absolute cheapest option, but it can be practical.

Sometimes the best saving is avoiding SVR quickly and safely.

When a full remortgage may save more

A full remortgage to a new lender may save more if:

• another lender has a better deal
• your current lender is not competitive
• your LTV has improved
• you want to borrow more
• you want a different product type
• your current lender cannot help
• you want better flexibility
• your income fits another lender better
• fees and charges still make switching worthwhile

A new lender may offer a lower rate, but the process may involve affordability checks, valuation and legal work.

The total cost needs comparing.

Fees can wipe out savings

A remortgage that looks cheaper can become less attractive once fees are included.

Costs may include:

• product fee
• arrangement fee
• valuation fee
• legal fee
• broker fee
• exit fee
• early repayment charge
• telegraphic transfer fee
• title-related legal costs
• product-transfer fee
• insurance changes

Some deals include free valuation or legal work.

Others charge higher fees in return for a lower rate.

The correct comparison is total cost over the deal period, not just the headline rate.

Early repayment charges can change the answer

If you remortgage before your current deal ends, you may face an early repayment charge.

This can be expensive.

An ERC can reduce or remove the saving from switching early.

Before moving deal, check:

• whether an ERC applies
• how much it is
• when it ends
• whether the charge reduces soon
• whether your lender has a product transfer option
• whether a new deal saves enough to justify the cost
• whether waiting is better

For more detail, read can you move house without paying early repayment charges?

Should you remortgage early?

You may be able to review options before your current deal ends.

This can help you avoid drifting onto SVR.

It can also give time to compare lenders, prepare documents and check affordability.

But switching too early may trigger ERCs.

The right timing depends on:

• current deal end date
• ERC amount
• available rates
• product fees
• lender offer validity
• whether rates are rising or falling
• your future plans
• whether you are moving soon
• whether your current lender offers a product transfer

Early review is sensible.

Early switching needs calculation.

Why timing matters

Timing can affect remortgage savings.

Starting too late may mean:

• moving onto SVR
• rushed decisions
• fewer options
• document delays
• legal delays
• affordability problems discovered late
• higher monthly payments while waiting

Starting too early may mean:

• ERCs
• fees before needed
• locking into a deal too soon
• reduced flexibility if plans change

A sensible approach is to start reviewing before the deal ends and decide based on the numbers.

Can remortgaging help if rates have risen?

Yes, but the savings may look different.

If rates have risen since your last deal, remortgaging may not reduce payments compared with your old fixed rate.

But it may still save money compared with SVR.

For example, your old fixed rate may have been very low.

A new fixed rate may be higher.

But the lender’s SVR may be higher still.

In that case, remortgaging can reduce the size of the payment shock rather than produce a lower payment than before.

For more detail, read how rising interest rates affect your mortgage.

Can remortgaging help if rates fall?

If rates fall, remortgaging may help by giving access to cheaper products.

But you should still compare:

• product fees
• ERCs
• offer timing
• current lender deals
• new lender deals
• fixed vs tracker options
• flexibility
• total cost
• future plans

Do not assume that falling rates automatically mean you should switch immediately.

The deal has to work after costs.

For more detail, read is now a good time to get a mortgage?

Fixed, tracker or variable when remortgaging

The product type affects both savings and risk.

A fixed rate gives payment certainty for a set period.

A tracker rate usually moves in line with a benchmark rate.

A standard variable rate can change at the lender’s discretion.

The cheapest option today may not be the best if it exposes you to payment increases you cannot afford.

For more detail, read fixed vs variable mortgages: which is better right now?

Remortgaging and affordability checks

If you switch to a new lender, expect affordability checks.

The lender may assess:

• income
• outgoings
• debts
• childcare
• student loans
• car finance
• credit cards
• mortgage term
• interest rate
• stress testing
• credit history
• property value
• loan-to-value

Affordability can affect whether you can switch lender and how much you can borrow.

For more detail, read how mortgage lenders assess affordability.

Remortgaging and stress testing

Lenders may test whether the mortgage would still be affordable if rates or circumstances changed.

This can matter if you want to:

• borrow more
• switch lender
• change term
• change repayment type
• consolidate debt
• move from interest-only to repayment
• apply with reduced income
• remortgage after credit issues

Stress testing can reduce the options available.

For more detail, read how mortgage stress tests actually work.

Can remortgaging save money by consolidating debt?

Remortgaging to consolidate debt may reduce monthly payments, but it needs caution.

Debt consolidation can make unsecured debt cheaper monthly by spreading it over a longer mortgage term.

But it may increase the total interest paid over time.

It can also turn unsecured debt into debt secured against your home.

That means missed payments could put your home at risk.

Debt consolidation should be considered carefully and usually with advice.

Can remortgaging save money if your credit has improved?

Yes, it may.

If your credit history has improved since your last mortgage, you may have access to more lenders or better rates.

This could happen if:

• missed payments are older
• debts have reduced
• credit card balances are lower
• defaults have aged
• affordability has improved
• income has increased
• overdraft use has reduced
• recent conduct is cleaner

Credit improvement does not guarantee a better deal, but it can help widen options.

For more detail, read how your credit score affects your mortgage.

Can remortgaging save money if your income has improved?

It can.

A higher or more stable income may improve affordability.

This may help you:

• switch lender
• borrow more if needed
• access better criteria
• choose a shorter term
• reduce total interest
• avoid being stuck with current lender
• improve application strength

However, income must be evidenced properly.

For more detail, read how much can I borrow for a mortgage in the UK?

Can remortgaging save money if you are self-employed?

Possibly.

A self-employed borrower may remortgage to a better deal if income evidence is strong and lender criteria fit.

But self-employed income can be assessed differently between lenders.

One lender may use an average.

Another may use the latest year.

Another may look at salary and dividends.

Another may consider retained profit.

Choosing the right lender can affect both approval and cost.

For more detail, read can you get a mortgage if you’re self-employed?.

Can remortgaging save money if you have multiple income streams?

Possibly, if the lender accepts enough of the income.

A borrower with salary, commission, bonus, second-job income, self-employed income or rental income may get different results from different lenders.

The better the income is evidenced, the stronger the case may be.

For more detail, read mortgages for people with multiple income streams.

What if your circumstances have worsened?

If your circumstances have worsened, remortgaging to a new lender may be harder.

This can happen if:

• income has fallen
• debts have increased
• credit history has worsened
• property value has fallen
• LTV has increased
• mortgage arrears have appeared
• employment has changed
• childcare costs have increased

In this situation, a product transfer with your current lender may be more realistic than a full remortgage.

Do not assume switching lender is always best.

What if you have missed mortgage payments?

Missed mortgage payments can reduce remortgage options.

A product transfer may be possible in some cases, but lender rules vary.

Switching to a new lender may be harder if arrears are recent or ongoing.

If you are struggling to pay, contact your lender early and consider free debt advice.

For more detail, read what happens if you miss a mortgage payment?

When remortgaging may not save money

Remortgaging may not save money if:

• ERCs are high
• fees outweigh the saving
• your current lender offers the best deal
• you plan to move soon
• your credit position has worsened
• your income has dropped
• your LTV has worsened
• legal delays cause extra costs
• you choose the wrong product
• you borrow more unnecessarily
• you extend the term without understanding total cost
• you consolidate debt without advice

This is why the decision needs a proper comparison.

The moving-home problem

If you plan to move soon, be careful before remortgaging into a long fixed-rate deal with large ERCs.

A cheaper rate today could become expensive if you sell before the deal ends.

You may be able to port the mortgage, but porting is not guaranteed.

For more detail, read can you move house without paying early repayment charges?

How to calculate whether remortgaging saves money

To calculate properly, compare:

• current monthly payment
• future SVR payment
• new monthly payment
• product fees
• valuation fees
• legal fees
• broker fees
• exit fees
• ERCs
• cashback
• total cost over the deal period
• mortgage balance after the deal
• overpayment flexibility
• moving plans
• likelihood of needing extra borrowing
• product transfer option
• full remortgage option

The cheapest-looking rate is not always the cheapest deal.

Product fee example

A deal with a lower interest rate but a high product fee may not be cheaper.

For example:

Deal A: Higher rate, no product fee. Deal B: Lower rate, £1,499 product fee.

Deal B may look better at first because of the lower rate.

But if the saving is small, the fee may wipe out the benefit.

This matters especially on smaller mortgage balances.

Should you add the product fee to the mortgage?

Some borrowers add the product fee to the mortgage rather than pay it upfront.

This can help cash flow.

But if the fee is added to the mortgage, interest may be charged on it.

That can increase the long-term cost.

Before adding a fee, compare:

• paying upfront
• adding to the mortgage
• total interest
• monthly payment
• cash savings
• emergency fund needs

There is no universal answer.

Should you use a broker to remortgage?

You do not have to use a broker, but a broker can be helpful.

They may compare:

• product transfers
• new lender remortgages
• fixed rates
• tracker rates
• variable options
• fees
• ERCs
• affordability
• lender criteria
• total cost
• timing

A broker can also help if your case is not straightforward.

This may include self-employed income, credit issues, multiple income streams, arrears, additional borrowing or moving plans.

For more detail, read how getting a mortgage without a broker works.

Common mistakes to avoid

Avoid:

• waiting until after the deal ends
• sitting on SVR by accident
• focusing only on the headline rate
• ignoring product fees
• ignoring ERCs
• assuming product transfer is always cheapest
• assuming new lender is always cheapest
• remortgaging before checking LTV
• borrowing more without checking long-term cost
• consolidating debt without advice
• fixing for too long if you may move
• ignoring legal timescales
• leaving documents until the last minute
• assuming lower monthly payment means lower total cost
• using online calculators as proof

A good remortgage decision is based on total cost, not guesswork.

For more detail, read are online mortgage calculators accurate?

Realistic example

A homeowner has £220,000 left on their mortgage.

Their current fixed rate is ending.

If they do nothing, they will move onto SVR and pay around £1,450 per month.

They compare options and find a new fixed-rate deal at around £1,150 per month.

The monthly saving is around £300.

But the new deal has a product fee.

They compare:

• monthly payment saving
• product fee
• legal costs
• valuation
• total cost over the fixed period
• product transfer option
• new lender option
• whether they may move soon

After the full comparison, the remortgage still saves money.

The saving comes not just from the rate, but from avoiding SVR and choosing the right structure.

Related guides

If you are thinking about remortgaging to save money, these guides may also help:

• If you need the full process explained, read what is remortgaging and how does it work?
• If your deal is ending soon, read what happens at the end of a fixed-rate mortgage?
• If rates are changing, read how mortgage rates actually work.
• If higher rates are affecting you, read how rising interest rates affect your mortgage.
• If you want to compare product types, read fixed vs variable mortgages: which is better right now?
• If you are worried about ERCs, read can you move house without paying early repayment charges?
• If you want to understand LTV, read what is loan-to-value LTV and why it matters.
• If affordability is tight, read how mortgage lenders assess affordability.
• If payments are already difficult, read what happens if you miss a mortgage payment?

These guides work together because remortgage savings depend on rates, fees, timing, LTV, affordability, ERCs, product transfers and lender choice.

FAQs about how remortgaging can save money

Can remortgaging save money?

Yes, it can, especially if it helps you avoid SVR, secure a better rate, improve LTV or choose a more suitable product. But fees and charges must be included.

Is remortgaging always cheaper?

No. Remortgaging may not save money if early repayment charges, product fees or legal costs outweigh the benefit.

What is the biggest remortgage saving?

Often, the biggest saving comes from avoiding the lender’s standard variable rate when your current deal ends.

Is a product transfer cheaper than remortgaging?

Sometimes. A product transfer may be simpler and cheaper to arrange, but a new lender may offer a better deal. Compare both.

Can I remortgage before my fixed rate ends?

Possibly, but early repayment charges may apply. Check whether switching early saves enough to justify the cost.

Does better LTV help remortgaging?

Yes, a lower LTV can sometimes give access to better rates and more lender options.

Can remortgaging reduce monthly payments?

Yes, it may reduce monthly payments through a lower rate or longer term, but extending the term can increase total interest.

Can remortgaging reduce total interest?

Yes, especially if you secure a lower rate, shorten the term or make overpayments. It depends on affordability and product rules.

Should I remortgage if I am moving soon?

Be careful. A new fixed deal may include early repayment charges. Check portability and moving plans before committing.

Should I use a broker for remortgaging?

A broker can help compare product transfers, new lender options, fees, ERCs, affordability and total cost.

Bottom line

Remortgaging can save money, but the saving must be calculated properly.

The biggest saving often comes from avoiding your lender’s standard variable rate when your current deal ends.

You may also save money if your LTV has improved, your credit position is stronger, your income has increased, or another lender offers a better deal.

But remortgaging is not automatically cheaper.

Fees, early repayment charges, legal work, product terms and future plans can change the answer.

The best remortgage is not simply the lowest headline rate.

It is the deal that gives the best overall result for your mortgage balance, property value, income, plans and risk tolerance.

Doing nothing can be expensive.

But switching without checking the full cost can be expensive too.

The right answer comes from comparing the options properly.

👉 Get a remortgage savings review before your current deal ends.