How to remortgage your home: the conveyancing process explained

This article is part of our mortgage crisis series. If you are remortgaging, our solicitors can help you understand the legal aspects of the process.

What does remortgaging mean?

Remortgaging means moving your mortgage while staying in the same property. It may involve securing a new agreement with your existing mortgage provider, or you might decide to move to a different lender, especially if they offer a more attractive rate.

Remortgaging happens ordinarily at the end of a mortgage deal (usually a fixed mortgage) - but there can be other good reasons to consider switching early. Higher mortgage rates are - for the time being - a fact of life, but you may still be able to find a better deal.

• Reduce mortgage costs
• Adapt to life events
• Avoid lender's standard variable rate (SVR)
• Greater financial certainty
• Pay off your mortgage sooner
• Release equity

Why are more homeowners remortgaging?

Whether you are on a fixed-rate mortgage product, a tracker mortgage, or a variable-rate deal, soaring borrowing costs are currently a cause of concern to homeowners across the country. 

The Bank of England (BoE) base rate is the most critical interest rate in the UK. When the BoE increases its base rate - as has happened recently - borrowing costs and mortgage rates follow suit.

Despite government efforts to calm the financial markets, the average rate for a two-year fixed mortgage has risen to over 6% - the highest level of interest in 14 years. Interest rates will likely continue to rise for the remainder of 2023 into 2024.

In addition to first-time buyers, existing homeowners are also significantly impacted - an estimated 300,000 borrowers come off a fixed-rate deal every three months.

If homeowners do not remortgage when their fixed deal ends, the interest rate converts to the lender's standard variable rate (SVR) - rising alongside the BoE rate. Likewise, people on tracker mortgages also see their monthly repayments rising significantly.

Securing the best remortgage rate is now the top priority for many people - whether because their current mortgage term is ending, to reduce monthly outgoings, or to free up cash.

How does the legal process work?

As with buying or selling a property, remortgaging your property is referred to as conveyancing. A qualified solicitor or conveyancer will oversee the process - undertaking checks, searches, and other important legal and financial details.

Using an experienced legal adviser helps ensure a smooth process throughout, satisfying the mortgage lender's requirements and avoiding any problems for you in the future. 

• ID checks - Be prepared to provide your ID for your mortgage provider and conveyancer for specific checks, which are a legal requirement. Your conveyancer will need to verify the identity of each person named on the mortgage and property deeds.
   
• Source of funds checks - Your conveyancer is legally required to check the source of the funds you use as the mortgage deposit. Lenders and anti-money laundering (AML) services are on high alert for any suspicious activity. 
   
• Obtaining title documents - Your conveyancer will obtain title registration documents for your property from the Land Registry. These title deeds confirm you are the legal owner of the property you are remortgaging. The title documents also set out any restrictions on the property.
   
• Dealing with your current mortgage lender - Your conveyancer will liaise with your current lender, requesting a redemption statement which tells you how much you have remaining on your mortgage, any interest due and any associated exit fees.
   
• Conveyancing checks - Usually, conveyancing searches (e.g. water and drainage, environmental) do not need to be carried out on a remortgage transaction - however, some lenders have specific requirements.
   
• Reviewing the terms of your new mortgage offer - The mortgage lender will issue a formal offer to you and your conveyancer, detailing the criteria you must meet for the loan to be advanced. You will need to check and review the offer carefully. Your conveyancer will then arrange a date with the lender to complete the remortgage.
   
• Completion - Upon completion, your mortgage will be transferred over. Your solicitor will arrange all the details, provide a completion statement, and ensure everything is transferred and completed correctly.
   
• Land Registry requirements - After completion, your conveyancer will register the new charge at the Land Registry. Updating the register can take several months, particularly if it is a leasehold property, as the freehold owner may be required to confirm certain matters.

How long does the remortgaging process take?

If your current mortgage deal is ending, you should start look around six months before. The process to secure a new agreement with a new lender typically takes 4-8 weeks. 

What are the costs of remortgaging?

If you are considering a remortgage, it is essential to assess your financial situation. Before making a decision, it is a good idea to speak to an experienced financial advisor or mortgage broker about your options.

There are typically three costs involved: 

1. Early repayment charges and exit fees - Most fixed-rate mortgage products have early repayment charges (ERCs) during the initial fixed period, which will potentially be thousands of pounds. Fees are usually based on a % of the outstanding debt remaining. 
    
2. Arrangement fees - Often new mortgage offers come with an arrangement fee. Most lenders will allow you to choose between paying the arrangement fee upfront or adding it to the mortgage - which which is likely to cost more in the long run. 
    
3. Legal fees - No property or property transaction is exactly the same and the legal fees will reflect the particular requirements of your remortgage. Please contact our remortgage solicitors to discuss how we can help. You will also need to pay any disbursements - the costs related to your matter that are payable to third parties, such as Land Registry fees.

Contact our remortgaging solicitors

Our solicitors and conveyancers provide a fast, reliable and cost-effective service for remortgage conveyancing, guiding you through the process in a friendly and efficient manner.

We are proud to be accredited under the Law Society's Conveyancing Quality Scheme (CQS), which is the recognised quality mark for legal experts in purchasing or selling property.

We have offices in London, Brighton, Eastbourne, Hastings, Uckfield, and Ulverston, and we work with clients locally and nationally.