Can you remortgage early?

Yes, you can usually remortgage before your current deal ends, but whether it makes sense depends on whether your existing mortgage has an early repayment charge (ERC) and how far you are into your term. Many lenders also let you lock in a new deal in advance of your current one ending, sometimes without any charge, so it is worth checking the timing before assuming you need to pay to leave early.

What counts as remortgaging early?

“Remortgaging early” usually means one of two things:

• Leaving your current deal before it ends, for example switching lender or product part-way through a fixed or tracker period.
• Arranging your next deal in advance, so it is ready to start the moment your current one ends. This is common and does not usually count as leaving early.

The second is often encouraged, since many lenders allow you to agree a new deal a few months ahead, often 3 to 6 months before your current one finishes, depending on the lender. The first, actually switching while a deal is still running, is where an early repayment charge is more likely to apply.

What is an early repayment charge?

An early repayment charge (ERC) is a fee some lenders apply if you repay or switch away from your mortgage before an agreed period ends, most often during a fixed rate. Not every mortgage has one. Where they do exist, ERCs are usually set out as a percentage that can reduce the closer you get to the end of the deal, though the exact structure varies by lender and mortgage.

Check your original mortgage offer or your latest annual mortgage statement for the exact terms that apply to you, as ERCs vary between lenders and products.

When might remortgaging early make sense?

There is no single right answer, and this is not something we can decide for you, but people sometimes weigh up remortgaging early when:

• Rates or their circumstances have changed significantly, and the potential benefit of a new deal may outweigh the cost of the charge.
• They need to raise money, for example through a further advance or a new remortgage, and cannot wait for their current deal to end.
• Their credit history has improved, and they want to lock in a better deal before it is due to renew.
• A relationship or ownership change means the mortgage needs to be restructured sooner than planned, for example after a separation.

In each case, it is worth comparing the cost of any early repayment charge against what you would gain, and getting advice if you are unsure.

How do you find out if you have an ERC?

The clearest place to check is the mortgage offer you were given when you took out your current deal, which sets out the ERC structure, if any, for each year of the fixed or tracker period. Your annual mortgage statement often repeats this information and may show the current figure that would apply if you left now. If you cannot find either document, your lender can confirm the position, and it is worth asking in writing so you have a clear record of what you were told.

It is also worth asking whether the ERC reduces on a set date each year or gradually, since this affects whether waiting even a short time might reduce or remove the charge. Some deals have a stepped ERC that falls each year of the fixed period, while others apply a flat percentage throughout.

What does it cost to remortgage early?

Beyond a possible early repayment charge, remortgaging early involves the same types of cost as any remortgage: a valuation fee, a product or arrangement fee, and legal fees, though a free legal package is often available for straightforward remortgages. Our guide on how much it costs to remortgage covers this in more detail, and our bad credit remortgage calculator can help you get a rough idea of your numbers.

What changes if you have adverse credit?

An early repayment charge is usually set by the terms of your existing mortgage and does not typically depend on your credit history. What can change is which lenders are willing to offer you a new deal if you want to switch early. A new lender will still run a credit check and assess your file, so a CCJ, default or other adverse credit is considered in the same way as it would be for any other remortgage application.

If your current lender is willing to offer you a product transfer instead of moving to a new lender, this can sometimes be arranged with fewer checks, since FCA rules allow lenders to switch existing customers without a full affordability assessment where you are not borrowing more. This can be worth exploring if adverse credit might make a move to a new lender harder, though a lender can still decide what it offers someone in arrears. If you are behind on payments or worried about affordability, free and impartial help is available from MoneyHelper, StepChange and National Debtline before you take on a new mortgage commitment.