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Remortgage mortgage information

Here are a selection of the most common questions regarding a remortgage mortgage

It's easy to navigate the mortgage process when you have a broker that really understands your situation and budget. We'll pull together all the information you need, spending time with you to get everything just perfect.

We'll ask you questions like:
  • What are your plans for the future?
  • What type of job do you do?
  • What's your income and pay structure?
  • What are your family circumstances?

We'll then research the mortgage rates on offer and look at the market to provide you with clear, relevant information you can use with confidence.

That way, when you're ready to make a decision, you can do so knowing that you've got all the facts.

Our mortgage advisers work closely with you to save you time and give you the very best chance of a successful application.

During the application process, we'll:

  • Talk you through all your options with a free consultation
  • Recommend the right mortgage for your situation
  • Check how much you can afford to borrow
  • Help you to gather the information and documents you need for your application
  • Help you prepare your application for submission
  • Submit your application to the lender
  • Liaise with the lender, solicitors and estate agents.

Once your mortgage has been offered, we'll support you all the way through to completion.

We'll work hard to build a lasting relationship with you.

So you'll always have someone you trust to help with any queries or requirements in the future.

There are two main reasons for remortgaging:

  • To borrow additional funds
  • To get a better mortgage deal with a new lender, normally when your current deal expires

Sometimes you might want to do a combination of the two.

The benefits of shopping around

It can be very tempting to simply renew with your current lender because it might seem like the easiest option. However you could be missing out on a really competitive deal, so it's always worth seeing what else is out there.

We can help you with everything, whether you want to borrow more from your lender, or switch to a new one. We'll do all the analysis for you, comparing what your existing lender can offer with other deals on the market.

We'll keep it really simple for you, streamline the whole process and offer straightforward advice on the benefits and risks of switching. For example, many lenders offer a free legal service with their remortgage deals, saving you money. However, if you need to complete quickly you may be better off selecting your own solicitor. We can help you with that.

For great advice on every aspect of remortgaging and what it means for your particular situation, just ask.

Top tip: Plan ahead

Get in touch with us around six months before your existing mortgage deal expires, or well before you need additional funds. That gives us plenty of time to find the best deal for you.

Getting a mortgage is important, but it doesn't have to be complicated. We'll handle every step for you, deal with all the paperwork and take away all the hassle. Here's a quick overview of how the process works and how we will help you:

  • We'll talk to you in detail about your situation and budget to work out the maximum you can borrow. This will help make sure you're looking for properties in the right price bracket.
  • We'll explain all the documentation we'll need to put together to support your application.
  • Once you've found a property, we'll find your ideal mortgage and manage the application process for you. We'll make it as simple as possible.
  • The lender then carries out a survey to assess the property, and their underwriter will review it all to confirm it's affordable for you. This might include asking for a reference from your employer or accountant
  • Once the lender's happy with all the checks, they'll make a formal mortgage offer. Then we'll help you complete the legal details and exchange contracts with the seller. We'll be there to talk you through every single piece of paper so you don't need to worry about a thing.

Want more detail about the process?

Here's our step-by-step guide
  1. It's best to speak to us before you start looking at properties. We can help you narrow down your search by focusing only on homes within your price range. This will save you time so you find your perfect place quicker.
  2. Here's what will happen when you first meet one of our advisers:
    1. We'll get to know you and how much you already understand about mortgages.
    2. We'll pull together all the information and documents a lender will need from you, ready for when you make an application.
    3. With your permission, we'll carry out a credit check with the lender to produce an Agreement in Principle (AIP).

Top tip: You're in safe hands

We know that making multiple credit checks can affect your credit rating, but don't worry, we are experts in this area. We'll only do what's necessary to make sure you get the best possible mortgage.

  1. Once you've got your AIP, you can start looking for properties with total confidence. You'll know exactly what your budget will cover and what types of home lenders will approve a mortgage for.

Top tip: We're with you all the way

Bear in mind that not all lenders approve mortgages on all types of property. Chat things through with us regularly during your property search and we'll make sure you stay on the right track.

  1. Found a great property and had an offer accepted? That means it's time for another meeting with us. Here's what we'll cover:
    1. We'll recap all the information we put together when we first met. Things move quickly now, so it's important we have all the right documents to hand.
    2. Then we'll go through the fine detail about your lender's policy to give you complete confidence about going forward. The great thing about working with Alexander Hall is that we've got excellent relationships with lenders and we can often speak directly to them to make sure everything is in order. This means no surprises and a much better chance of success.
    3. We'll submit the mortgage application on your behalf. As with everything we do, you don't need to worry about complex paperwork - we'll handle every detail for you.
  • We'll double and triple check your application to make sure that it's as strong as it can possibly be. Once we submit it to the lender, it goes to their underwriter. It's their job to make sure all the documents are in order. They'll also organise a mortgage survey to check the property is something they're happy to lend money for.
  • Top tip: We've got great connections

    1. Because we've built strong relationships in the industry, we can sometimes chat directly to your underwriter. This is a huge help for you because it means we can fine-tune the application to maximise your chances of success.
    2. You'll get a mortgage offer once the lender is happy with your application. The time it takes depends on the lender, but in general it tends to be quicker when you've got a broker like us on your side to work directly with them. We make sure they've got everything they need to make a decision.
    3. Some mortgage brokers finish working with you once you've got your offer. We do things differently at Alexander Hall. We'll stay in touch with you, your estate agent, solicitor and surveyors all the way through to completion. We'll keep in contact with you after that too, making sure that as and when your needs change, your deal remains the most suitable and competitive on the market.

    Arranging a buy-to-let (BTL) mortgage is similar to any other mortgage, and you can read details in our 'How does the mortgage process work' guide.

    There is one key difference though, based on the fact you plan to rent the property out.

    If you want a mortgage for a property you will live in, a lender will look at many factors, including your personal income and expenditure to help decide if they are happy to make you an offer.

    However, with BTL the lender will also take into account how much you will be able to rent the property out for.

    There's a common myth that the self-employed find it hard to get a mortgage. While the options will vary, there are a number of competitive solutions. To learn more, it's essential to talk to a knowledgeable mortgage adviser.

    A number of lenders specialise in self-employed mortgages and have developed a range options that rely on different criteria.

    This can include:
    • Lending against your most recent year's income, rather than an average of the last two or three years
    • Lending against your company net profit - rather than just salary and dividends to reach a potentially more positive lending amount
    • Consideration of your daily rate if you're a contractor.

    Lenders will need to see specific documentation if you're self-employed. This will depend on your circumstances and we can advise on exactly what it means for you. It's best to discuss this with us as soon as possible to give you enough time to pull everything together.

    Sole trader, director, contractor or partner?

    The type of self-employed role you have affects how a lender assesses your suitability. Here's a brief overview of the main considerations:

    Sole trader

    Most lenders ask for a minimum of two years' of your full trading accounts and personal HMRC tax overviews. They'll typically also take the average of either two or three years' of your net profit before tax.

    Some lenders will consider an application if you have only one full trading year, though this depends on your circumstances. For example, have you have switched from employed to self-employed in the same line of work?

    In addition to tax overviews, you'll need to provide bank statements showing your trading income. If you use a separate account for business transactions, you'll need to be able to show these account statements to your lender.

    Director

    A lender may class you as employed, but normally only if your share in the company is small. The threshold varies from 5% upwards, but if it's 20% or more, most lenders will consider you as self-employed.

    The lender will usually require additional documentation to show that the business is solvent, and some will take into account your share of profits, in addition to your salary and any dividends.

    Contractor

    While contractors are typically company directors, many lenders acknowledge the fact that these arrangements are not the same as a corporate company director. This is reflected in their tailored affordability assessments.

    Some lenders will assess contractors using the same affordability assessment as any other company director. However, where this limits the borrowing capacity, there are other options available. The lender can undertake an affordability assessment as if you're employed and reference the gross contract daily rate as income. This will be subject to certain conditions, including history and continuity of contracts.

    Partner

    Lenders take a range of approaches to assess income and affordability for partners in firms. The options available to you will depend on a number of factors. These include the particular structure of pay, the percentage equity holding in your partnership and the size and nature of the partnership itself.

    There are tailored options available for partners of different sized firms, ranging from small local businesses to large multi-national firms. You'll need your compensation/drawings/reward statements for the latest year. Ideally, you should have details of the previous one to two years too. You will also need to show details of how you structure your remuneration within the partnership. Lenders may ask for a reference from a senior or managing partner in the business, depending on the circumstances.

    If you already own 4 or more properties, or have the ambition to build your portfolio, there are now additional regulatory requirements for lenders to factor in to their assessments. The regulation is not prescriptive but some examples include the lender's relationship with the borrower, how much experience the borrower has as a landlord and a view of the borrower's overall property portfolio.

    We have many clients who are classed as 'portfolio landlords' and have expertise in helping clients refinance and build their property portfolios, with strong relationships with all the key lenders in this market.

    Stamp Duty Land Tax (SDLT)

    SDLT is tax you pay when you buy a property. There is a standard calculation when you buy your main home, which goes up the more expensive it is. The same applies when buying further properties, but includes an additional 3% rise.

    You need to pay this supplement whether it's a second home, a new home if planning to rent out your current one (known as 'let to buy'), or a BTL purchase, even if you're living in rented accommodation yourself.

    You can't avoid the 3% by saying you own one property and having your spouse buy the second in their name. You and your spouse are considered to be one 'unit'.


    Stamp Duty Land Tax Examples
    Purchase price SDLT
    £250,000 £10,000
    £400,000 £22,000
    £550,000 £34,000

    Income tax

    You are liable to pay tax on income earned from rental property. This is income tax if it's a personal purchase, or corporation tax if you own it through a limited company. The amount depends on rental income, mortgage interest and other tax-deductible costs.

    Tax Relief Examples
    Period Tax relief @ highest tax rate Tax relief @ basic rate (20%)
    Up to March 2017 100% 0%
    April 2017 to March 2018 75% 25%
    April 2018 to March 2019 50% 50%
    April 2019 to March 2020 25% 75%
    From April 2020 0% 100%

    It's important to get professional tax advice on this before making any decisions about purchasing your BTL.

    Accountants

    Many landlords use an accountant. It's an additional cost, but they can often help you reduce the tax you need to pay, saving you money in the long run. Ideally you want someone who is a specialist in property tax and has experience advising landlords.

    It's up to you to follow legislation, including regular inspections and maintaining tenants' rights. You must handle repairs and maintenance, rent collection, tax payments and other legal requirements correctly. Items to keep up‒to‒date include:

    • Annual gas safety inspection
    • Energy Performance Certificate
    • Property and landlord insurance
    • Liability insurance

    You can either manage everything yourself or hire professionals to take care of it for you. For example, you can avoid all the hassle of day‒to‒day management by taking on a fully managed service from your letting agent. Our sister company Foxtons can do exactly that for you.

    Straight talking mortgage advice

    Call our expert advisers now

    08000 38 37 36