Guide · Mortgages & Property
Remortgaging in the UK: When to Do It and What It Costs
At the end of every fixed or tracker deal, your mortgage reverts to the lender's Standard Variable Rate. That rate is almost always significantly higher than what you can get elsewhere. Remortgaging is how you avoid it.
Why the SVR costs so much
The Standard Variable Rate (SVR) is the lender's default rate — the one you fall onto automatically when your deal ends. Lenders set SVRs at their own discretion, and they are typically 2–4 percentage points above the best available fixed rates. Unlike the Bank of England base rate, the SVR is not capped or directly linked to any external benchmark; lenders can change it at any time.
Most borrowers should treat the SVR as a temporary holding position, not a long-term home for their mortgage. The table below shows the monthly payment difference on a £200,000 outstanding balance with 20 years remaining across three rate scenarios.
| Rate | Type | Monthly payment | Total interest (20yr) |
|---|---|---|---|
| 2.5% | Expired fixed deal (reference) | £1,060 | £54,400 |
| 7.5% | Typical SVR | £1,612 | £186,880 |
| 4.5% | New 5-year fix | £1,266 | £103,840 |
Staying on the SVR costs an extra £346 per month compared with securing a new 5-year fix at 4.5% — over £4,150 per year.
Early Repayment Charges and the right time to act
Most fixed-rate mortgages carry an Early Repayment Charge (ERC) that applies if you switch before the deal period ends. ERCs typically start at 3–5% of the outstanding balance in year one and decline by 1 percentage point per year. On a £200,000 balance, a 3% ERC is £6,000 — often far more than any rate saving could justify.
The optimal window is 3–6 months before your deal expires. Most mortgage offers are valid for 3–6 months, so you can secure a new rate in advance that completes on the day your current deal ends — no SVR period, no ERC. Your broker or lender will coordinate the timing.
How LTV affects the rate you're offered
Loan-to-value is the ratio of your outstanding mortgage balance to the current market value of your property. Lenders tier their best rates at LTV thresholds — typically 60%, 75%, 80%, 85%, and 90%. The biggest rate improvement comes from crossing the 60% LTV threshold. A borrower at 59% LTV may be offered a rate 0.5–1.0 percentage points lower than one at 76% LTV.
If your home has risen in value since you originally borrowed, your LTV will have fallen even if you have not repaid capital — potentially moving you into a better tier. Ask your broker to obtain a new property valuation as part of the remortgage process. A modest overpayment can also push you across an LTV threshold and save considerably more in reduced interest than the overpayment cost.
Product transfer: the no-hassle alternative
A product transfer means switching to a new deal with your existing lender without moving to a new mortgage. There is no new affordability assessment, no new conveyancing, no valuation fee, and it can often be completed within days via an online portal. If you are close to — but not yet past — an ERC threshold, a product transfer can sometimes be arranged to switch on a specific future date, minimising or avoiding the ERC.
The limitation is that you only see your current lender's deals. If the wider market offers significantly better rates, a full remortgage with conveyancing costs (typically £500–£1,500 for legal fees) can still save more overall. A whole-of-market mortgage broker can compare both options.
Frequently asked questions
When is the best time to remortgage?
Start looking 3–6 months before your current deal expires. Most mortgage offers are valid for 3–6 months, so you can lock in a rate now that completes when your existing deal ends — avoiding both the SVR and any Early Repayment Charge. Leaving it until after the deal expires means you will be paying the SVR while you arrange the remortgage, which could cost hundreds of pounds in wasted interest.
What is an Early Repayment Charge?
An Early Repayment Charge (ERC) is a penalty for repaying your mortgage — or switching to a new deal — before your current fixed or tracker rate period ends. ERCs are typically expressed as a percentage of the outstanding balance: often 5% in year one, 4% in year two, declining to 1% by the final year of the fix. On a £200,000 balance, a 3% ERC is £6,000. Always check your ERC before remortgaging early; it can outweigh the interest saving.
Is a product transfer the same as remortgaging?
A product transfer means switching to a new deal with your existing lender. It is quicker and cheaper than a full remortgage — there is no new conveyancing, no new valuation fee, and often no arrangement fee. The downside is that you only see your current lender's deals, not the whole market. A product transfer makes sense when your LTV is close to an ERC threshold, when your credit situation has worsened, or when the market rate difference is small.
How does my LTV affect remortgage rates?
Loan-to-value (LTV) is one of the biggest factors in the rate you are offered. Lenders offer their best rates at 60% LTV or below, with pricing tiers typically at 60%, 75%, 80%, 85%, and 90% LTV. If your home has risen in value since you took out your mortgage, your LTV will have fallen — potentially moving you into a better pricing band. Paying down capital (or making overpayments) can also push you into a lower LTV tier and unlock a meaningfully better rate.