Remortgaging: When to Do It, How to Save, and Common Pitfalls

Thinking about switching your mortgage but not sure if now is the right time? You’re not alone. Many homeowners wonder whether a new deal will actually lower their monthly payments or free up cash for other goals. In this guide we break down the key moments to consider, the pros and cons of staying with your current lender, and the reality of using a remortgage to pay off debt.

Timing Your Remortgage

The biggest factor is the loan’s end date. Most fixed‑rate deals last two to five years, and lenders usually allow you to exit a few months before the term finishes without a hefty penalty. If you’re approaching that window, check the early repayment charge (ERC) – it can eat into any savings you expect.

Even if you’re still early in the term, a genuine drop in market rates can make a switch worthwhile. In 2025, the Bank of England base rate has nudged lower, which means many lenders are offering rates below 3%. Use a simple calculator: subtract your current rate from the new one, multiply by the remaining balance, and you’ll see the potential monthly gain.

Another timing cue is your credit score. A higher score not only unlocks better rates but also gives you leverage when negotiating fees. If you’ve recently cleared a credit card or finished a debt consolidation loan, you might see a noticeable bump.

Using a Remortgage to Clear Debt

Can you roll your credit‑card balances or personal loans into your mortgage? Technically yes, but it’s not a free pass. A remortgage that adds debt will increase the total loan amount, which means you’ll pay more interest over the life of the loan, even if the rate is lower.

The trick is to compare the cost of staying in debt versus the cost of borrowing more against your home. For example, a credit‑card at 19% APR versus a mortgage at 2.8% looks like a clear win, but you also lose the protection that a mortgage offers – you could be at risk if housing prices fall.

Before you decide, run the numbers: take the remaining balance of the debt you want to clear, multiply by its APR, and compare that to the extra interest you’d pay on the higher mortgage amount. If the mortgage savings outweigh the extra interest, you’re probably on the right track.

One final thought: using your home as collateral means any missed mortgage payments could lead to repossession. Only consider this route if you’re confident you can meet the higher monthly payment.

So, should you stay with your current lender? If they’re offering a competitive rate and low fees, sticking around can save you the hassle of paperwork and valuation costs. However, it’s worth getting quotes from at least two other banks – competition often drives better deals.

Bottom line: remortgaging works best when you have a clear goal, whether it’s a lower rate, a shorter term, or debt consolidation. Check your timeline, watch the ERC, and crunch the numbers before you sign. With the right approach, you could shave hundreds of pounds off your mortgage each year and free up cash for the things that matter most.