What happens when you remortgage?

Remortgaging means swapping your current mortgage for a new one, either with the same lender or a different one. The mechanics happen mostly behind the scenes: your old mortgage is formally repaid on completion day, using the funds from your new one, and the new loan then runs in its place.

What actually happens when you remortgage?

Once you’ve chosen a new deal and it’s been approved, a completion date is set. On that date, funds from your new lender are used to pay off, or “redeem,” your existing mortgage in full. Your new mortgage then begins, and your monthly payments switch to the new lender or new deal from that point. For the step-by-step process of getting to that point, from application through to offer, see how to remortgage with bad credit, step by step.

What happens before completion day?

Completion is the final step of a longer process. Before you get there, you’ll typically have compared deals, submitted a full application with supporting documents, had the property valued, and received a formal mortgage offer once the lender’s underwriters are satisfied. Only once that offer is in place, and your solicitor has completed the legal checks, is a completion date agreed. Our guide on how to remortgage with bad credit, step by step walks through each of these stages in order.

What happens to your old mortgage?

Your solicitor or conveyancer, who may be provided as part of a free legal package, requests a redemption statement from your existing lender showing exactly what’s owed on the completion date, including any early repayment charges if applicable. That amount is paid off using the new mortgage funds, and the old lender’s legal charge against your property is removed and updated at the Land Registry. You don’t need to contact your old lender directly to close things down; this is handled as part of the legal process.

What happens on completion day?

On completion day itself:

• Your new mortgage funds are released to redeem the old mortgage.
• Any remaining balance, such as released equity, is paid to you or used as instructed.
• Your existing direct debit for the old mortgage is cancelled, and a new one is set up for the new mortgage.
• The change in lender or terms is registered against your property.

It’s worth checking your buildings insurance and any linked life insurance around this time too, since some policies are tied to a specific mortgage account and may need updating, even though they don’t have to be with the same lender.

Does remortgaging show on your credit file?

Yes. Applying for a mortgage typically involves a hard credit search, which is visible to other lenders, unlike the soft searches used for eligibility checks. Once your new mortgage starts, it appears on your credit file as an active account, and your ongoing repayment history is recorded against it going forward, the same as any other credit account.

What happens if bad credit is found during the process?

Lenders review your credit file as a normal part of underwriting, whether you’ve disclosed something or not. If a CCJ, default, or missed payment shows up that wasn’t expected, or looks different from how you described it, the lender may ask follow-up questions, request evidence such as proof a debt was satisfied, or in some cases decide not to proceed. This is why checking your own statutory credit report before applying is worth doing: it lets you and your adviser address anything upfront rather than being caught out partway through.

What if completion doesn’t happen before your current deal ends?

Sometimes a remortgage takes longer than expected, and the completion date falls after your existing deal has already ended. If that happens, your mortgage typically moves onto your lender’s standard variable rate (SVR) for the gap in between, which is usually higher than either your old rate or your new one. This isn’t unusual with a slower application, particularly where extra checks are needed on a credit file, and it’s one reason starting the process in good time, often 3 to 6 months before your deal ends, matters as much as the outcome itself.

What this means if you’re remortgaging with adverse credit

If you have a CCJ, defaults, or a history of missed payments, expect the process to involve a bit more back and forth around underwriting than a straightforward case, but the completion mechanics themselves, redeeming the old mortgage and starting the new one, work the same way for everyone. Being upfront with your adviser and solicitor about anything on your file, and having documentation ready such as a certificate of satisfaction for a paid CCJ, tends to keep things moving. Our remortgage with a CCJ and remortgage with defaults pages cover what underwriters typically want to see for those specific situations.

If arrears on your current mortgage are part of the picture, your existing lender is required to treat you fairly and consider options such as a payment arrangement, and it’s worth speaking to them directly alongside any remortgage application. Free guidance from MoneyHelper can also help you weigh up whether remortgaging now, or addressing the underlying arrears first, is the more useful next step.

For what to have ready before you start, see what documents do you need to remortgage.