The Different Types of Remortgage

There are 10 main types of remortgages in the mortgage world; here is a list of these remortgage types with an useful explanation below on how we can help.

Remember to always speak with a reputable, trusted mortgage broker to run through the various remortgage types with you and for them to recommend the best one that suits your personal situation.  

The 10 different types of remortgages are: 

1. Remortgage for a Better Deal – This is when you shop around for the best interest rate to save you money. 

2. Remortgage to Release Equity – With this type of remortgage, you can release tax-free equity from your home. 

3. Remortgage for Home Improvements – Thinking of adding on to your mortgage to fund home and/or garden renovations such as a new kitchen, extension, adding a bedroom or something else. 

4. Debt Consolidation Remortgage – This is when you take your unsecured lending such as store cards, credit cards and personal loans and add them to your mortgage.  Note, this is high risk, our mortgage broker team will discuss all the risks associated with this type of remortgage.  

5. Equity Release Remortgage (Age 55+) – With this type of specialist lending aimed at customers aged 55+, you can release equity from your home to supplement retirement income, complete home renovations, repay an existing mortgage, provide gifts to family, or anything else.  If you already have a lifetime mortgage, we can also explore options such as borrowing more or refinancing it for a better deal.   

6. Help to Buy Remortgage – If you took advantage of the governments help to buy equity loan scheme you can explore your options to repay this loan via a remortgage.  With this type of remortgage, you’ll have three main options, these are discussed in more detail below.  

7. But to Let Remortgage – If you are a landlord and you are looking to remortgage a buy to let property, either for a better deal or to release equity, you can do this via a buy to let remortgage product.  

8. Remove a Name from a Mortgage – If you have recently separated or divorced, at remortgage time, providing that the person looking to take over the mortgage passes the lender checks, a name can be removed from the mortgage.  

9. Remortgage to Change the Term – You’ll have the option to reduce or extend your mortgage term at remortgage time depending on your personal situation. 

10. Remortgage Specialist Finance – There are more specialist remortgage types available such as a secured loan, house in multiple occupation (HMO) or commercial mortgage.  More on these below.  

How to know which remortgage type to go for? 

Which type of remortgage type to go for will depend on your personal situation, what you are looking to achieve, and your objectives.

If you rely on your current mortgage lender offering, you a new deal you will be missing out on potentially lower rates elsewhere.  Mortgage lenders love it when customers don’t shop around and fall on to their higher standard variable rates!

Often, mortgage lenders now make it very easy for customers to commit to a new deal via their internet banking app or portal.  Please do not do this without speaking to a mortgage broker, like us, first.

We can help with all the above types of remortgages and can provide help and guidance through the whole mortgage advice process.  

Remortgage for a Better Deal 

If you are currently on a fixed rate deal and you have less than 6 months to go, you’ll be able to secure a new mortgage deal.  We’ll compare this to any product transfer mortgage deals you’re being offered to save you both time and money.

Usually, your existing lender will offer you a product transfer deal and then we’ll compare this to what is available elsewhere. It’s always usually cheaper for you to switch to a new lender. 

Capital Raising Remortgage  

When you remortgage to release equity you can borrow extra funds for most legal purposes, examples of this would be; for large consumer purchases, gifts to help family members, to purchase a Buy to Let property or for Debt Consolidation.

We’ll be able to compare any further advance mortgage deals being offered by your existing lender to what is available with other lenders to find you the best one.

Remember you will pay interest on a remortgage for a lot of years normally so it’s important you borrow for the right reasons. 

Remortgage for Home Improvements 

If you feel your home would benefit from some upgrading, then it is possible to remortgage for home improvements. Investing in your home can be a very good investment. Some improvements such as extensions or loft conversions can put value on your home. Kitchens and bathrooms can look tired after a few years and you can increase your mortgage to pay for cosmetic alterations as well as structural work.

If the amount you need to borrow is significant then the lender will reserve the right to ask you for estimates for the works you intend to have carried out. You don’t necessarily have to use the Contractor that provided the estimate to do the actual works.

Some people borrow for Home Improvements even if they know their home may not go up in value. If you have decided you are already in your “forever home” and if you can afford it, there’s nothing wrong with borrowing for this purpose at all.  

Debt Consolidation Remortgage  

This remortgage type is a very specialist area of mortgage lending so if you are looking to consolidate debts it’s vital that you speak with one of our mortgage team asap.  Doing a debt consolidation mortgage without a trustworthy mortgage broker on your side could result in you paying more interest and potentially losing your home.

When you add unsecured debt to your mortgage you may end up paying back more interest overall. This is because a mortgage term tends to be much longer than that of a personal loan (although it doesn’t have to be).

The other thing you need to think about is that you are taking unsecured debt and securing your home. That doesn’t sit easily with everyone as you are under the risk of repossession if you cannot afford your mortgage in the future.

You will need to know the interest rates that apply to the debts that you are considering rolling into your mortgage. If you have 0% credit cards, then adding these to your mortgage will start attracting interest.

You should consider all options before deciding to remortgage for debt consolidation, such as asking family members for assistance if possible and reducing as much non-essential expenditure as possible.

Once you have considered all of the above and decided a remortgage for debt consolidation could be right for you then it’s vital you speak with a mortgage advisor. The advisor will take responsibility for the recommended remortgage advice and help you with your application.

Often, consolidating debts into your mortgage leads to a reduction in your monthly outgoing. Some customers end up reducing their payments by hundreds of pounds. 

Equity Release Remortgage (Age 55+) 

Our older clients, aged 55+, are often looking to remortgage to raise capital on their property. Reasons such as to supplement pension income, helping family, pay for a big purchase and to clear debts are popular.

Already have an equity release plan in place, equity release remortgages are possible. We can look at refinancing these if more funds are required and getting you the best deal.

Mortgage lenders have been very innovating in this space over the last few years and lots of great products are now available to older homeowners looking to remortgage.

Whether you will qualify for a regular mortgage, a mortgage into retirement or an equity release plan will depend on various factors such as your age, income, and plans with the property.  We can explore all these different mortgage types with you.  

Help to Buy Remortgage 

With this type of remortgage, if you took advantage of the governments help to buy scheme you can remortgage to repay your help to buy loan 6 months before your deal ends. Depending on the current value of your property and affordability you have 3 main options when considering a help to buy remortgage.

Take out a new mortgage (or use savings) to repay the equity loan in full, pay part of your equity loan, or do nothing and stay as you are.  

Buy to Let Remortgage 

Buy to let remortgage types including a remortgage for a better deal, capital raising or extending the term.

With a buy to let remortgage, the property value will be considered along with the rental income received.

Our buy to let mortgage broker team will guide you through the whole process.  

Remove a Name from a Mortgage 

If you have recently separated or divorced, at remortgage time, providing that the person looking to take over the mortgage passes the lender checks, a name can be removed from the mortgage.

Documents will be required by the person taking over the mortgage to prove income such as payslips and bank statements.  Mortgage lending criteria will also need to be met.

Our mortgage broker team will help explore your options with this type of remortgage and let you know how much your new monthly repayments will be.

Often, when a client is removing a name from a mortgage, they look to raise some equity from the property to pay off the ex-partner.  This can all be done at the same time with one transaction by our mortgage advice team.  

Change the Term of your Mortgage 

Our clients usually reduce or extend their mortgage term for three main reasons, the first is to reduce their monthly payments, the second is to get their mortgage paid off quicker, and the third is if their interest-only mortgage is ending soon.

All mortgage lenders will have different criteria when it comes to maximum age so it’s always best to do this with a mortgage broker like us, on your side.  Here, we have a full range of later life lending mortgage product types available also.

There are risks and alternative product available so it’s important seek mortgage advice to explore all your options.  

Remortgage a Specialist Finance Product 

You are also able to refinance other lending products such as a secured loan, house in multiple occupation (HMO) or commercial mortgage.

These products are classed as specialist finance so it’s always best to speak with a reputable mortgage advisor, like us, to save you time and money.