Can I remortgage early? A guide from SAM Conveyancing. A sunny Victorian terrace with bay and dormer windows

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Can I remortgage early?

by:

Andrew Boast

(Last Updated: 01/07/2021)

Created on:

01/07/2021

Read by:

17

7 min read

Remortgaging early, or even selling early, is something you'd normally consider if, for example, there's a preferential mortgage rate to change to, you want to move house, or, because the relationship with your joint owner has broken down and you need to sell your property.

The issue though is how soon can you remortgage early, or sell, when tied into the mortgage and the penalties that arise with the Early Repayment Charge.

As you'll have seen from our Early Repayment Charge article, mortgage lenders often charge huge penalties if you repay your mortgage before the early mortgage redemption charge period expires - in essence you are locked into your mortgage.

However, here are 2 ways to avoid paying the early repayment charge (plus our top tip on when best to remortgage):

1

Stay with the same mortgage lender

This is the most common way of not paying the early repayment charge when remortgaging or buying another property.

It does however limit you to the mortgage product options the mortgage lender offers which may not be as preferential as you can get on the open market.

If you're looking to sell and buy another property then this process is often called 'porting your mortgage', but in reality your existing mortgage is paid off in full on completion of the sale and the new mortgage is registered over the new property.

Be careful though; some mortgage lenders won't allow you to do this, for example:

These are examples and mortgage lenders have different terms depending on the specific mortgage product.

Can I remortgage early with Halifax Bank Plc?

Taking your product rate to a new mortgage - In the future, you can apply for a new loan on another property.

If Halifax agrees to the new loan you can take the following product(s) and any early repayment charge with you for the remainder of the product rate period(s).

New loan applications are assessed in line with the lending policy at that time which may, for example, affect the repayment method, loan amount or term.

The new loan will be subject to the terms and conditions in force when you make your application.

Can I remortgage early with Metro Bank Plc?

If you move house you may be able to transfer the amount outstanding on your mortgage to another property provided you still meet our lending criteria at the time of application for the new mortgage.

Fees may be charged when you transfer your mortgage. If you transfer your mortgage within the period when Early Repayment Charges are applied, you may not have to pay the Early Repayment Charges if the purchase of the new property completes within 30 days of the discharge of this mortgage and the new mortgage is for an amount equal to or more than this mortgage.

Can I remortgage early with Virgin Money?

lf we are willing to accept a mortgage application from you in the future, we will allow you to transfer the remainder of this mortgage product to your next property.

lf we allow you to transfer this mortgage product the following conditions will apply:

You must be selling this property and purchasing another property to let out and complete the new loan within three months of repaying this loan.
If you do not repay the loan on this property on the same day that you complete the loan on your next property then any applicable Early Repayment Charge set out above will be payable on that day.

If you then complete the loan on your next property within three months of that day, any Early Repayment Charge paid will be refunded in full.
If the value of your next property is less than this property, you may not be able to transfer all of the outstanding loan balance to your new property.
Additional borrowing will not be available on this mortgage product.

Can I remortgage early with National Westminster Bank Plc?

You have the possibility, during the period in which an early repayment charge is payable, to port your existing mortgage product(s) to your new property subject to terms.

Can I remortgage early with Nationwide Building Society?

If you move house, and we are able to offer you a new loan, you can keep this mortgage product and you will not have to pay an early repayment charge if you transfer the balance and the terms of this product to the new loan for the remainder of the Benefit Period.

You can find out your mortgage lender's position on porting your mortgage to a new property in the What happens if you move house? section of your mortgage offer or you can speak to your mortgage lender and ask them.

Do you need help to remortgage early?

We have a specialist remortgage department with mortgage brokers and specialist remortgage conveyancing solicitors. For further help call us on 0207 112 5388 or you can book an appointment with our broker or get a quote for our remortgage conveyancing.

Book a Free Mortgage Consultation

Access to whole of the market – Available Outside of Work Hours – No need for face-to-face meeting - Terms Apply

How long does it take to remortgage with a new lender?

You can read our article that explains the complete remortgage process here.

However from the point of mortgage offer being released a freehold should take 2 to 3 weeks to complete and a leasehold 4 to 5 weeks.

One of the key reasons a leasehold takes longer is because there are often outstanding ground rent and service charges so make sure to keep yours up to date to speed your remortgage up.

2

Ask to repay the mortgage early

With 12 to 6 months left to run on your mortgage you may be able to get mortgage lender's consent to repay the mortgage early.

There is no guarantee mortgage lenders will allow you to do this, however some do. You need to speak to the mortgage lender's redemption/repayment department and get their written authority that they will agree to waive the early repayment charge.

Early Mortgage Repayment Charges

How soon can you remortgage?

Realistically, if you are unable to port your mortgage, remain with the existing mortgage lender, or, get the lender's consent to repay your mortgage early, then you are left having to wait for your early repayment charge period to expire.

That said it is advisable to start to organise your next mortgage 3 to 6 months before the end of your existing mortgage, especially if there is a preferential rate in the market.

Mortgage offers normally last for 6 months and it can take 3 to 4 weeks to get a new mortgage offer.

If you are able to secure a preferential rate with a new mortgage lender, then you can look to get a mortgage offer and then wait for your early repayment charge period to expire.

This places you in a good position to remortgage or buy another property using the better mortgage product.

Do you need help to remortgage early?

We have a specialist remortgage department with mortgage brokers and specialist remortgage conveyancing solicitors. For further help call us on 0207 112 5388 or you can book an appointment with our broker or get a quote for our remortgage conveyancing.

Book a Free Mortgage Consultation

Access to whole of the market – Available Outside of Work Hours – No need for face-to-face meeting - Terms Apply

Frequently Asked Questions

Can I remortgage early with same lender?

Yes and no, its possible to change to a different mortgage product - but this is called a 'product transfer' rather than a remortgage.

How long before my fixed rate ends can I remortgage?

It's possible to remortgage as early as 6 months after taking out your mortgage. However, remortgaging within the first year will come with the highest early repayment charges.

If you are planning to remortgage when your fixed rate ends, you can begin applying 6 months before that date, as mortgage offers are usually valid for 6 months.

Is it worth remortgaging early?

You will need to weigh the early repayment charges against the benefits - usually a lower interest rate. Our mortage brokers can help you choose the best mortgage product for you.

Do you need a deposit to remortgage?

You don't need a deposit to remortgage. Generally you remortgage the equity you already have in your home.

However, you could add a new deposit to the equity in your home to remortgage to a much smaller mortgage - lowering your monthly repayments or shortening the length of your mortgage term, or both.

Written by: Andrew Boast

Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.

Reviewed by: Caragh Bailey

Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.