Remortgaging your home

When to consider remortgaging

Switching your mortgage to a different lender is called a remortgage.  You can remortgage at any point, but you may have to pay an early repayment charge if you remortgage before your mortgage term ends. 

Most people choose to switch their mortgage just before their mortgage deal ends, to avoid being moved to their lender's Standard Variable Rate (SVR). Generally, SVR mortgages have a higher rate of interest, and monthlys repayments are more likely to change.
 

You might choose to remortgage if your home has increased in value and you want to move to a lower loan-to value (LTV) mortgage. Mortgages with a lower LTV tend to offer lower interest rates. 
 

If you want to change the type of mortgage, you may also consider switching, for example, you may decide to rent your home and remortgage from a residential product to a buy to let product. 

You may want to wait to remortgage if you owe more on your mortgage than the property is worth (known as negative equity). 

How to remortgage  

If you're thinking about remortgaging, a mortgage advisor or broker can help you decide what option might be right for you.  

Before you remortgage, here are some key things to know: 
 

Your home's value 

The value of your home may have changed since you first took out your mortgage. This affects your loan to value (LTV) ratio, and can influence which mortgage products are available to you. 

If you're a Welsh resident, you can get an idea of your home's value with our Welsh House Price Index 
 

Your mortgage balance 

You can ask your lender for a redemption statement to find out how much you still owe on your mortgage. 

Fees and charges 
 

Valuation fees 

You may need to pay for a valuation of your home. Check with your lender if they offer this service - and whether it's free or comes with a fee. 
 

Legal fees  

To carry out searches and transfer mortgage money from one lender to another you need legal support. You may be charged for this service, or some lenders may offer legal support for free. 
 

If you remortgage with Principality 

If you decide to remortgage with us, you may be charged a product fee, depending on the mortgage product you choose. 
 

You may also need to check with your lender if you need to pay any of the following: 

• Early repayment charges 
• Exit or redemption fees 
   

If you move from Principality to a new lender  

If you switch to a new lender before your mortgage term ends you may have to pay an early repayment charge (ERC). This charge is usually between 1% and 5% of your outstanding mortgage balance.  
 

To avoid paying an ERC you'll need to wait until your current mortgage term ends before switching. Be sure to tell your new provider and solicitors during the application process that you want to switch only after your current term ends. For example, if your mortgage product ends on 31 January, plan to move to your new provider from 1 February onwards.