Remortgage to cut your monthly payments

Published by Adam Williams on 29 July 2015.
Last updated on 17 October 2017

Cut your mortgage payments with our weekly guide to the best remortgaging deals.

A bank or building society often offers introductory ‘teaser’ rates to new customers, either at a lower variable rate, or a fixed rate for an introductory period.

Once this is up, your monthly payments can rocket as your deal will likely revert to your lender’s standard variable rate (SVR) – which is usually much higher. 

Moneywise is here to search the market each week to find the most competitive deals for you, whether you’re looking to fix for a longer period or take out a variable rate product. The products on this page are our Moneywise Best Buys - the top remortgage deals around.

Our example mortgage hunter is looking to remortgage on their £200,000 property, and will be looking to borrow £100,000 over 15 years – so they’re looking for a 50% loan to value (LTV) deal. Our buyer has decided to pay fees up front to avoid being charged extra interest. 

Best fixed rate remortgage deals

Moving to another mortgage provider will involve going through its application process and affordability criteria. Fixing you mortgage will protect you from future interest rate rises but you may incur fees in the process. Do your homework and make sure a new deal is worth it. 

Santander, up to 60% LTV, 1.39%
Fixed until 2 January 2020 then reverts to SVR (currently 4.49%)

This mortgage is a 1.39% deal, fixed until 2020. Monthly payments are £616, representing an annual cost of £7,412. This product also comes with no fees and £250 cashback.

Barclays, up to 60% LTV, 1.49%
Fixed until 31 October 2019 then reverts to SVR (currently 3.99%)

This is a 1.49% product, fixed until 2019. Monthly payments are £620, giving an annual cost of £7,438. This product comes with no fees and £200 cashback.

Remortgage and lock your rate

At the moment it’s still relatively cheap to fix your mortgage repayments for the longer term. The best deals are available for well under 3%. However, monthly repayments are much higher than shorter fixes, so it only makes sense if you expect rates to rise in the next few years.

Santander, up to 60% LTV, 1.79%
Fixed until 2 January 2023 then reverts to SVR (currently 4.49%)

The rate is 1.79% and comes with no fees and £250 cashback. That’ll cost £634 a month and £7,616 each year. Our buyer will revert to a standard variable rate - currently 4.49% - after this fixed period.

First Direct, up to 60% LTV, 2.49%
Fixed for 10 years then reverts to SVR (currently 3.69%)

If you're willing to lock in for 10 years then this deal from First Direct comes with a low 2.49% rate and £35 fee. The repayments will be £666 per month, or £8,013 on an annual basis.

Variable rate mortgages

If you think the Bank of England’s base rate is likely to stay the same or fall then a variable rate could be best for you. However, if these rates rise at any time you could be left out of pocket.

Skipton Building Society, up to 60% LTV, 1.2%
Bank of England base rate (currently 0.25%) plus 0.95% for two years then reverts to SVR (currently 4.74%)

Skipton Building Society currently offers the cheapest variable rate deal at 1.2% for two years. This rate will rise to once the initial term is up. However, the rate can still change if the Bank of England base rate changes. Monthly repayments are £607, this represents an annual cost of £7,393.

Best interest-only mortgage deals

If you’re looking for interest-only options, remember the rules are now a lot stricter and you’ll need to show a well-thought out plan for repaying the capital at the end of the mortgage. Monthly repayments are much lower than with capital repayment, but you'll pay more interest on an interest-only mortgage in the long run. 

Not every provider will lend on an interest-only basis, so if you’re looking for one it’s best to speak to a mortgage broker. Our mortgage tool can help you get a feel for the rates on offer.

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