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Remortgaging is secured lending against your home that can be used to repay your debts

In a nutshell A remortgage is where you take out a new mortgage on a property that you own. The new mortgage either replaces an existing mortgage or (where the property is 100% owned) allows you to borrow funds against the property.

Remortgaging is a big decision. If you’re considering this option instead of other debt solutions it’s advisable that you seek debt help advice from an organisation that provides free, impartial advice.

What debt problems is this debt help suitable for?

Remortgaging may be the best debt help for homeowners who own 100% of their property, or those whose home has significantly gone up in value since they took out their existing mortgage product.

Our debt expert’s opinion on the pros and cons…

Advantages of Remortgaging debt solution

  • If you find the right mortgage product you can benefit from relatively low interest rates compared to financial products such as a personal loan.
  • Debt problems with multiple lenders? You may be able to consolidate your existing debts into a single, more affordable payment (although you should consult with a debt agency first and foremost).

Disadvantages of Remortgaging debt solution

  • Choosing to repay your debts over a longer period of time may increase the overall cost of repayment.
  • This form of debt assistance requires responsibility – if you fail to keep up with repayments your property could be repossessed.
  • Remortgaging does involve additional fees, which could wipe out any gains you make in securing a lower interest rate.

Worried about debts that won't go away?

FAQs – Remortgaging

  1. What are the average costs involved with remortgaging?

  2. Remortgaging generally costs more that £1000. The exact amount will depend on a few factors:
    • The valuation fee
    • The reservation fee
    • The arrangement fee
    • Legal fees
    • A broker commission fee (if applicable)

  3. What documents will I need to remortgage?

  4. When applying for a remortgage you’ll be required to provide:
    • Details about your property
    • Details of your bank account (such as bank statements)
    • Proof of your financial circumstances
    • Proof of your income (such as pay slips, P45, or your accounts if you are self-employed)
    • Proof of your outgoings (such as bank statements)
    • Proof of identity (such as your passport or driving licence)
    • Proof of your address (such as a council tax or utility bill)
    • Proof of your employment
    • Proof of your assets (such as investments, savings, other properties, or accounts)

  5. How long will it take to process my remortgage application?

  6. Remortgaging can be a relatively time-consuming process, which makes communicating with your other creditors important. In the medium term, your creditors may be able to agree to a payment holiday, as defaulting on your agreements could impact your chances of being approved for a remortgage product.

  7. Can I remortgage more than once?

  8. Yes – there is no set upper limit as to how many times you can remortgage. However you need to carefully consider the associated fees, as well as the seriousness of the situation if you were to fall behind on your repayments.

  9. Will I be able to remortgage if I have a poor credit rating?

  10. If you have a low credit score you may find it difficult to secure a remortgage, particularly if you’ve missed payments on the existing mortgage, or have been late in paying.

  11. Can I remortgage if I’m self-employed?

  12. Yes, however it can prove challenging given the fluctuating nature of self-employment. In this instance you may need to consult a broker who has access to a wider pool of mortgage products.

  13. Can I remortgage if I own less then 10% of the property?

  14. You may be able to, however the products that cater to this level of equity are limited.

  15. How much equity do I have in my property?

  16. Equity is the difference between the current value of your home and the balance that remains outstanding on your current mortgage.

    If your property is today valued at £100,000 and you have a £50,000 mortgage, the equity is £50,000 or 25%.

  17. Why is it important to get a ‘Decision in Principle?’

  18. A Decision in Principle (DIP) provides you with a good idea as to whether you’ll be approved for a remortgage.

*An Individual Voluntary Arrangement (‘IVA’) is subject to the customer meeting qualifying criteria and gaining creditor acceptance. Monthly IVA payments include fees and may differ to the example provided, based on the assessment made of your own personal circumstances – these fees will be clearly explained to you in writing by your IVA company. Debt write off amounts are subject to creditor acceptance and vary by individual customer based on their own financial circumstances, and are applied upon successful IVA completion.

Substantiation example, Someone owes £60,000, they pay £100 over 60 months which equals £6000, write off amount would be £54,000 which is 90% of total debt level. Upon submitting your details on this website we will pass your details to one of our approved partners as this website does not give any advice.

Free debt counseling, debt adjusting and credit information services are available from the Money Advice Service.

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