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Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home. Borrowing over a longer term can mean paying back more in total.
Most homeowners remortgage for one of four reasons: to avoid moving onto their lender’s standard variable rate (SVR), to release equity, to consolidate other debts, or to change their mortgage term or the names on the mortgage. If you have adverse credit, the same reasons usually apply, though a few extra ones come into play too.
What are the main reasons homeowners remortgage?
A remortgage replaces your existing mortgage, either with a new deal from your current lender or a new lender entirely. People choose to do this for practical, financial reasons rather than any single “right” answer. If you’re not sure what a remortgage actually involves, our guide on what a remortgage is covers the basics first.
The most common triggers are:
- Their current fixed or tracker deal is ending.
- They want to borrow more against the value of their home.
- They want to combine several debts into one monthly payment.
- Their circumstances have changed, such as a change in income, a relationship breakdown, or wanting to shorten or lengthen the mortgage term.
Remortgaging to move off a standard variable rate
This is the single biggest reason people remortgage. When a fixed or tracker deal ends, most mortgages automatically move onto the lender’s standard variable rate (SVR), which is usually higher than the rate you were paying. Rather than let that happen, many homeowners arrange a new deal, often a few months ahead of their current one ending (commonly 3 to 6 months, depending on the lender).
If your credit file has taken a knock since your last mortgage, this is often the point where the difference becomes obvious: rates for people with adverse credit are often higher than mainstream rates, and options can be more limited. That doesn’t mean remortgaging isn’t worth doing, but it’s worth checking your options rather than assuming the SVR is your only choice.
Remortgaging to release equity
Equity is the difference between what your home is worth and what you still owe on it. As you pay down your mortgage, or as your property’s value rises, that equity grows, and a remortgage is one way to access some of it as cash. People release equity for reasons ranging from home improvements to helping a family member, or occasionally to buy another property.
Our guide on how releasing equity through a remortgage works explains this in more depth, including how it’s different from later-life equity release products such as lifetime mortgages.
Remortgaging to consolidate debts
Some homeowners remortgage specifically to combine credit cards, loans or other unsecured debts into a single mortgage payment. This can lower the total monthly outgoing because mortgage terms are longer, but it comes with a real trade-off: those debts move from being unsecured to being secured against your home, and a longer repayment term can mean paying more in total interest over the life of the mortgage.
This is exactly the kind of decision a regulated mortgage adviser is required to weigh up carefully, considering whether it’s appropriate for your situation rather than just the monthly figure. Our debt consolidation remortgage page goes into the detail, including the alternatives worth considering first.
Remortgaging to change the term or the borrowers
Life changes prompt remortgages too. Some people shorten their term to be mortgage-free sooner, or extend it to reduce monthly payments. Others remortgage after a change in relationship status, to add a partner onto the mortgage, or to remove one, which needs the remaining borrower or borrowers to pass affordability in their own right.
Why do people with bad credit remortgage?
If you have a CCJ, a default, missed payments, or something else on your credit file, the underlying reasons for remortgaging rarely change, but a couple of extra factors often come into play:
- Needing to move away from a lender who won’t offer a new deal. Not every lender continues to offer new products to existing customers whose circumstances have worsened.
- Wanting to consolidate debts that contributed to the credit problem in the first place. This needs particular care, since it secures previously unsecured debt against your home.
- Trying to get back onto a more competitive deal once adverse credit is older. Most negative information drops off your credit file after 6 years, and even before that, some markers matter less as they age.
| Reason to remortgage | Applies to most homeowners | Extra consideration with bad credit |
|---|---|---|
| Current deal ending | Yes | Fewer lenders may offer a new deal |
| Releasing equity | Yes | LTV options may be more limited |
| Consolidating debts | Yes | Secures debt against your home either way |
| Changing the term | Yes | Affordability checks may be stricter |
| Adding or removing a borrower | Yes | Remaining borrower’s own credit is checked |
What this means if you’re remortgaging with adverse credit
If your credit file has CCJs, defaults, missed payments, or a history of arrears, the reason you’re remortgaging still matters, but so does timing and preparation. It’s worth getting your statutory credit report (free from each agency) before you apply, so you know exactly what a lender will see. Being on the electoral register at your current address also helps lenders verify your identity.
If money is tight or you’re struggling with existing debts rather than simply wanting a better deal, it’s worth speaking to a free debt charity such as MoneyHelper or StepChange alongside any mortgage conversation, particularly before deciding to consolidate debts into your home. Whatever your reason for remortgaging, a specialist adviser can talk through which options are realistic for your circumstances, since this guide can’t tell you whether remortgaging is right for you specifically.
For a step-by-step look at the process itself, see how to remortgage with bad credit.
Frequently asked questions
Is remortgaging always about saving money?
No. Saving money by leaving a standard variable rate is the most common reason, but many people remortgage to release equity, consolidate debts, change their term, or add or remove a name from the mortgage. The right reason depends on your own circumstances.
Can you remortgage just to get a lower monthly payment?
Yes, this is one of the most common reasons. A new deal, or extending the term, can lower monthly payments, though extending the term usually means paying more interest overall. See our guide on what a remortgage is for how the numbers work.
Do people with bad credit remortgage for different reasons?
Often the underlying reason is the same, such as a deal ending or wanting to release equity. Some people with bad credit are also remortgaging specifically to consolidate debts, though this needs care because it puts unsecured debt onto your home. It’s worth talking to a specialist adviser about your own circumstances.
Should I remortgage to pay off credit cards or loans?
This is a personal decision with real trade-offs. Spreading unsecured debt over a mortgage term can reduce monthly outgoings, but it turns that debt into something secured against your home and you may pay more in total interest over a longer term.