How soon can you remortgage your home?

Remortgaging can be a valuable financial tool for any property buyer. Whether you’re a first time buyer or a repeat purchaser, the prospect of getting a new and often better mortgage deal will certainly be welcome, especially if you have plans to release equity or wish to lower your household expenditure thanks to more manageable repayments. 

But, how soon can you remortgage after the initial purchase of your property? In this blog post, we answer that very question!

Are there any restrictions on remortgaging timescales?

If you chose to fix, the length of your mortgage deal would have made for essential reading when you were first selecting the product that worked for you. Whatever period of time you fixed for, it is important to acknowledge that most UK lenders allow you to remortgage after six months from the date of completion.

Known as the ‘six-month rule’, this restriction aims to reduce risky behaviour (like frequent switching) to ensure stability all-round. The six-month rule isn’t the be-all and end-all however. Some lenders may consider remortgaging sooner under certain circumstances.

When might you need to remortgage early?

There are many reasons why you might be considering remortgaging so early on. You may have designs on major property renovations or perhaps your home has increased in value. You could be looking to switch to a product that’s more fitting for the current economic climate after following the latest Bank of England (BoE) interest rates.

Remortgaging early could give you access to better interest rates and reduced monthly payments; give you the means to release equity for home improvements or debt consolidation; or enable you to avoid costly variable rates.

What about the downsides of remortgaging early?

For all the advantages remortgaging early offers comes just as many disadvantages, especially if you have a mortgage with early repayment charges (ERCs). We’ll let the HomeOwners Alliance share what you can expect when footing the bill for ERCs:

“If you have a mortgage balance of £200,000 on a 2-year fixed rate mortgage and it has a 2% charge for the first year, the ERC would be £4,000. If this steps down to 1% in the second year, assuming your ERC is based on the outstanding balance of your mortgage and that this has reduced to £190,000, the ERC would be £1,900.”

Most ERCs work on a sliding scale, meaning the longer you hold your mortgage for, the less you pay if you exit early. Some products however have fixed percentage charges that are applicable throughout the entirety of your fixed term.

There are other costs associated with remortgaging early too, including fees for valuation, legal support and arrangement, and all of these add up if you remortgage frequently. Remortgaging early and too often can also have a negative impact on your credit score.

Still think remortgaging early is right for you?

If you’re considering remortgaging before the six-month mark, or even before your fixed term ends on your current mortgage deal, it’s essential to seek advice and support from an independent mortgage broker – just like us!

We’ll help you determine if remortgaging early is right for your circumstances and guide you to a great mortgage deal.

Ready to get started? Contact us today to discuss your next steps.