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Mortgage types

Rate guide – remortgaging

Introduction to remortgaging

Remortgaging involves taking out a new mortgage on a property you currently own. People often choose to remortgage primarily to prevent being transferred onto their lender’s Standard Variable Rate (SVR), which tends to be significantly higher, once their initial fixed or discounted mortgage deal comes to an end.

Typically, the most attractive mortgage deals are available for a limited, set period. For example, you may wish to fix your interest rate for two, three or five years. Or, you may prefer a mortgage product with a rate that tracks and fluctuates with the Bank of England’s base rate for a particular term.

Whichever you choose, once the fixed term period is up, you will automatically fall onto your lender’s SVR. Set by your lender, this rate can be increased at any point, regardless of what is going on with the base rate.

It is often a much higher rate than the one you were previously paying, so your monthly repayments can increase considerably.

Remortgaging means you could avoid this by securing a lower interest rate with either your current, or a different, lender.

There are other reasons for switching. You could:

  • take the opportunity to secure a different or better deal.
  • release capital so you can access funds for, say, home improvements.
  • sidestep a rate hike.
  • have greater peace of mind.
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Did you know…
 

How remortgage rates are set

Remortgaging rates are shaped by various factors, including:

  • Deposit / loan-to-value (LTV), or equity levels: lower LTV bands often secure better pricing. The more equity you have in your property, the lower your LTV, which lenders view as less risky; which often means you’ll qualify for more competitive rates. In 2026, UK lenders may accept as little as 10% equity (90% LTV), though the most attractive rates are typically offered when you have at least 40% equity (60% LTV) or more. The best rate and deal for you will also depend on your individual objectives.
  • Term length: The Bank of England’s base rate plays a major role in whether remortgage rates rise or fall. As does the overall economic climate and decisions made by each lender. Shorter-term fixed-rate mortgages often have lower rates though you will need to look into remortgaging sooner; while longer-term deals offer more stability yet might be less cost-effective if interest rates fall.
  • Key lender criteria: this determines the types of deals you will have access to. Factors such as your credit history, income and remaining mortgage balance are all important.

Rates shown are indicative only and used for illustrative purposes. Actual rates vary by lender, product, borrower profile and market conditions at the time of application.

LTVTermRemortgage rate when moving to a new lenderProduct transfer rate when switching with your existing lender
60%2-year fixed3.82%3.71%
60%5-year fixed3.94%3.83%
75%2-year fixed4.14%3.90%
75%5-year fixed4.21%4.02%
85%2-year fixed4.35%4.13%
85%5-year fixed4.35%4.13%

External remortgaging expected to grow by 10% in 2026

Remortgaging remains a dominant feature of the mortgage market into 2026. UK Finance estimates that 1.8 million fixed-rate deals expire in 2026, with external remortgaging expected to grow by around 10% year on year.

Product transfers vs remortgaging away

  • A product transfer involves changing the terms of your existing mortgage with your current lender. It’s usually faster, involving less paperwork, and typically has no legal fees. However, you are limited to the rates and products offered by your current lender.
  • Remortgaging away involves switching your mortgage to a new lender. While you’ll have access to a wider range of products and potentially better rates, the process is more complex and requires:
    • Credit checks
    • Verification of income
    • Property valuations

It may also include valuation and legal fees.

Product transfers may be more suitable for those seeking simplicity and lower upfront costs, while remortgaging away can offer more choice and savings but involves more steps and possible additional costs. 

It's wise to consult a professional mortgage broker to help you decide which option fits your needs best.

How remortgage rates usually compare with purchase rates

Remortgage rates tend to be lower than purchase rates, especially when compared against the SVR offered by many lenders. Homeowners frequently remortgage to benefit from better rates, release capital, or consolidate debts, which can result in notable savings. 

Though, your own individual circumstances will also help determine whether remortgage rates will be lower for you. 

Factors such as your credit score, LTV ratio and the prevailing interest rates at the time will all have an impact.

Think carefully before securing other debts against your home – by consolidating your debts into a mortgage, you may be required to pay more over the entire term than you would with your existing debt which could increase the amount of interest payable overall

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Why remortgage pricing can be sharper at low LTVs

Remortgage pricing is often sharper at low LTVs because borrowers in this position present less risk to lenders. Essentially, a lower LTV means the homeowner has built up a healthy equity in their home, and lenders are more inclined to offer favourable rates in recognition of this.

You can find detailed, up to date information on other mortgage rates, below:

In the news

The Bank of England’s December 2025 Base Rate cut to 3.75% has reinforced expectations of further easing, with lenders already adjusting pricing in anticipation of future moves rather than reacting solely to past decisions.

While fixed-rate borrowers may not feel immediate benefits, tracker and SVR customers do - and fixed-rate pricing continues to reflect forward-looking market sentiment rather than current base rate levels alone.

At the time of writing, the BBC has announced that the UK is “set for a 'booming' mortgage market”, according to analysts.

With competition strong among lenders, there is a sense that rates could be cut. This is good news for those remortgaging or taking out product transfers.

Should rates fall modestly and even show signs of becoming more predictable, history tells us that the property market usually responds with greater confidence.

Major lenders lower rates as a surge in remortgage activity is predicted

Leading lenders such as HSBC, Nationwide, Santander and Barclays have all lowered their rates, signalling a determined push to offer more competitive pricing across the market. This rivalry is especially pronounced in the lower LTV brackets, with rates now falling below 4%. As a result, a surge in remortgage activity is anticipated, as borrowers look to secure improved deals without having to face additional affordability checks.

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FAQs

What affects remortgage rates?

Remortgage rates are primarily affected by:

  • the Bank of England’s base rate
  • inflation
  • the overall cost of borrowing
  • fluctuations in bond yields
  • your LTV ratio

These factors are closely linked, meaning changes in one can quickly impact the others and, in turn, influence mortgage costs.

Are remortgage rates cheaper than purchase rates?

Remortgage rates are typically lower than purchase rates, particularly when compared to the SVR offered by many lenders.

Do all lenders offer free valuations/legal fees?

No, not all lenders offer free remortgage valuations or legal fees. Many do, as part of their remortgage deals. Some charge upfront for these services. It’s prudent to check each lender’s specific terms.

How often do remortgage rates change?

Remortgage rates are updated on a daily basis, with lenders frequently adjusting their rates in line with shifts in the Bank of England base rate. This means that the rates available can change at short notice, making it important to review current offers regularly to ensure you’re getting the best possible deal.

Can I lock in a rate before my fixed deal ends?

It is possible to secure a new remortgage rate before your current fixed deal concludes. This process is often referred to as a product transfer or remortgage. Planning ahead is wise, ideally around four to six months before your current deal ends.

For up to date, personalised remortgaging advice, get in touch with James Leighton Nottingham.

References

https://www.theguardian.com/business/2025/dec/18/what-the-uk-interest-rate-cut-means-for-you-from-mortgage-deals-to-savings-rates
https://www.bbc.co.uk/news/articles/c4gv7vl06e1o

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