Remortgaging During COVID-19

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Many people are considering remortgaging during COVID-19, as this period is very enticing to remortgage due to interest rates falling as a result of measure put in place to help with the current pandemic. This has presented home owners with an opportunity to look for cheaper deals and seize on the chance of making further savings. In this article, we will look into the benefits of remortgaging during the Coronavirus pandemic.

What Does Remortgaging Involve

Remortgaging is the process of borrowers switching from their current mortgage deal to a new lender for a new deal. Alternatively another option is to gain a new rate via a product transfer which involves moving to a new deal with your existing lender. This usually takes place to reduce monthly mortgage repayments, although might also be combined with applying to borrow more money against the property. Either way a remortgage, or product transfer, can be a good way to access lower interest rates and better mortgage terms.

Below are a number of reasons for switching to a new deal:

  • To access reduced interest rates
  • Allows you to fix monthly payments and protects against possible rate rises in the future
  • Raise money to use for home improvements or other purposes
  • Releases equity from your home to raise a cash lump sum (help a son or daughter with the deposit to buy their first home)
  • Allows you to consolidate your debts
  • Raise money for buy to let purchase

It is important to remember that if your current deal is about to expire, your lender will automatically revert you to the lender’s standard variable rate (SVR). This switch to an SVR could be considerably more expensive than your current monthly repayments (often 2 to 4% higher) and result in much higher payments.

How Has The Pandemic Affected Interest Rates

Amid the Coronavirus pandemic, UK interest rates (the Bank Base rate) have dropped to their lowest rate in years. The Bank of England announced a base rate of 0.10% in March 2020, which was the lowest the base rate has been in the 325 years the bank has been operating.

The reducing interest rates mean that borrowers may be able to reduce their mortgage costs significantly, by remortgaging to a more competitive deal. If you have an outstanding mortgage that is considerably less than the value of your house, there is an opportunity to remortgage in order to release some of the equity to raise funds for other reasons, maybe to help with other household finances.

For borrowers who have fixed-term/fixed-rate mortgages that are coming to an end, you will be able to benefit from rate cuts, as you will potentially have the chance to move to a cheaper deal.

Other borrowers that are currently on their lender’s SVR will more than likely have expensive repayments, so by remortgaging you could possibly save hundreds to thousands of pounds per year too.

Lower Rates But Fewer Mortgage Deals On The Market

Although the COVID-19 pandemic has been a difficult period, many lenders have continued to accept remortgage applications. Throughout this time the number of mortgage products on the market has reduced so there is less choice available for borrowers. Lenders originally pulled products from the market to assess the risk levels associated with Coronavirus. As the Covid-19 crisis has led to people being on furlough and becoming unemployed along with the reduced activity in the housing market, lenders had originally been cautious with the mortgage deals available.

The market is still open for both new and existing customers at the majority of lenders. However, those with a larger amount of equity in their home will have a better chance of being accepted for a remortgage and get better rates. Currently, those with larger deposits, or equity in their property will have a greater choice when it comes to remortgaging.

Initially many lenders withdrew mortgages for borrowers with small deposits (less than 20% of the property’s value). However, the market has slowly eased and at the time of writing lending back to 95% was available, albeit at higher rates, and with less active lenders than there were pre-pandemic.

Why You Should Speak To A Mortgage Broker Before Making A Decision

Before applying for a remortgage (or any type of mortgage) you should consult a mortgage broker first. This is especially essential if you have a small amount of equity in your property. As mortgage advisors, we can search the whole market to assist you in identifying the right mortgage deal for you. Our mortgage brokers will also be able to advise on which lenders will be more likely to accept your remortgaging application and help obtain a mortgage offer as soon as possible too.

As whole of the market advisors, we will also be able to determine how long the remortgage process will take so you know what to expect when remortgaging your property. So, if you are thinking about remortgaging during COVID-19, get in touch with us here at Stuart Brown Mortgage Services to see how we could guide you through the process.


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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up the repayments on your mortgage.

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