How to compare remortgage deals in simple steps

Shopping around for a remortgage can feel more complicated than it needs to be. There are rates to consider, fees to factor in, and terms that vary from one lender to the next. The good news is that once you understand what to look at and why it matters, comparing deals becomes a much more straightforward process. This guide breaks it down into clear, practical steps.

Start with the overall cost, not just the rate

The interest rate is usually the first thing people look at, and it is an important figure. But focusing on the rate alone can be misleading. Two deals with identical rates can cost very different amounts in practice, depending on the fees attached to them.

A remortgage deal typically comes with some combination of the following costs: an arrangement or product fee, a valuation fee, and legal fees. Some lenders bundle these in, waive them entirely, or offer cashback to offset them. Others charge them separately, and the amounts involved can be significant.

The most reliable way to compare deals is to work out the total cost over the initial fixed period, adding fees to the interest you would pay across those months. This gives you a like-for-like figure rather than a headline rate that may not reflect what you will actually pay.

Understand the different rate types

Before you can compare deals fairly, it helps to understand what you are comparing. The main types of mortgage rate in the UK are fixed rates, tracker rates, and standard variable rates.

Fixed rates lock your monthly payment in for a set period, typically two, three, five years or longer. What you pay does not change during that time, regardless of what happens to interest rates more broadly. This can make budgeting easier, though you will usually pay an early repayment charge if you want to leave before the term ends.

Tracker rates move in line with an external benchmark, usually the Bank of England base rate, plus a set percentage on top. Your payments can go up or down depending on how that benchmark moves, which means less certainty month to month but the potential for lower payments if rates fall.

Standard variable rates are set by individual lenders and can change at their discretion. Most people end up on one of these when a fixed or tracker deal expires, and they tend to be less competitive than introductory products. Staying on a standard variable rate for any length of time without reviewing alternatives is worth avoiding where possible.

Check the loan-to-value tier you fall into

Lenders price their mortgage products according to risk, and one of the key factors they use is your loan-to-value ratio, often written as LTV. This is the size of your mortgage as a percentage of your property's value. The lower your LTV, the less risk the lender takes on, and as a result, the better the rates they are generally willing to offer.

Common LTV thresholds where rates tend to improve are 90%, 85%, 80%, 75%, 60%, and below. If your outstanding mortgage is close to one of these thresholds, it may be worth checking what your property is currently worth before you apply. A modest increase in value, or a period of overpayments, could move you into a lower band and open up more competitive options.

It is worth noting that property values can fall as well as rise, so any estimate of your current equity should be treated with some caution until a formal valuation has been carried out.

Factor in early repayment charges on your existing deal

Before you get too far into comparing new deals, it is important to check whether your current mortgage has any early repayment charges still in effect. These are fees charged by your existing lender for leaving before your current deal period ends, and they can be substantial, sometimes running to several thousand pounds depending on the size of your mortgage and how much of the term remains.

Early repayment charges are typically calculated as a percentage of the outstanding balance, and they often reduce the closer you get to the end of your deal. If you are within six months of your current deal ending, you may find there is little or no charge to leave. If you are further away from the end date, the calculation changes, and in some cases it may be more cost-effective to wait rather than switch immediately.

Compare the true cost over the deal period

Once you have gathered a shortlist of potential deals and understood the fees involved, the most useful comparison you can make is the total cost over the fixed term. This means adding together all of the interest you would pay during the deal period, plus any fees charged upfront or added to the loan.

For example, a two-year fixed deal at a lower rate but with a high arrangement fee may cost more overall than a slightly higher rate with no fee, particularly on a smaller mortgage. On a larger outstanding balance, the maths can work the other way. Running the numbers for your specific mortgage size tends to give a clearer answer than comparing rates in the abstract.

Some lenders also allow you to add the arrangement fee to the mortgage rather than paying it upfront. This can help with cash flow, but it means you will pay interest on that fee over the remaining mortgage term, which increases the overall cost.

Consider what happens when the deal ends

When you are comparing products, it is easy to focus entirely on the initial rate period and overlook what happens next. When a fixed or tracker deal comes to an end, you will usually move onto the lender's standard variable rate unless you remortgage again or arrange a product transfer. Standard variable rates vary between lenders and can be considerably higher than the deal rate.

This does not mean you should rule out a product based on its revert rate alone. Most people remortgage again when their deal ends rather than staying on the variable rate indefinitely. But it is worth being aware of the figure, particularly if your circumstances might make it harder to remortgage at that point in the future.

Use a whole-of-market broker where possible

Searching the market yourself through comparison websites can give you a useful starting point, but comparison tools do not always show every available product, and they cannot take your individual circumstances into account. A whole-of-market mortgage broker has access to a broader range of deals, including some that are only available through intermediaries, and can assess which products you are likely to be eligible for based on your income, credit history, and existing borrowing.

Brokers are also able to help you understand the full cost picture rather than just the headline rate, and they can manage much of the application process on your behalf. Some brokers charge a fee for this service while others are paid by the lender. Either way, it is worth asking about how a broker is remunerated before you proceed.

Frequently asked questions

What is a good LTV for remortgaging? There is no single answer, as the most suitable LTV depends on your circumstances and the deals available at any given time. Generally speaking, borrowers with an LTV of 75% or below tend to have access to more competitive rates, with further improvements often available at 60% and below. If you are close to one of these thresholds, it may be worth checking whether your property value has changed since you last had it assessed.

Should I always choose the lowest rate? Not necessarily. The lowest rate does not always mean the lowest overall cost. A deal with a low rate but high fees may cost more over the deal period than a slightly higher rate with no fees, depending on the size of your mortgage. Looking at the total cost over the fixed term is generally more reliable than comparing rates alone.

Can I compare remortgage deals if I do not know my exact property value? You can get a broad sense of the deals you might be eligible for using an estimated value, but lenders will carry out their own valuation as part of the application process. That formal valuation may differ from your estimate, which could affect the LTV band you fall into and the rate available to you.

What is APRC and should I pay attention to it? APRC stands for Annual Percentage Rate of Charge. It represents the overall cost of the mortgage across its entire term, including fees and assuming the rate reverts to the standard variable rate at the end of the deal period. It can be useful for broad comparisons, but because it stretches across the full term of the mortgage, it can sometimes be a less accurate guide than comparing the total cost over just the initial deal period.

How many deals should I compare before deciding? There is no fixed number, but looking at a range of options across different deal lengths and rate types tends to give a more complete picture than focusing on one type alone. A broker can help you narrow down the options based on your circumstances, which can make the process more manageable.

A final note

Comparing remortgage deals well is less about finding the lowest number on the page and more about understanding the full picture. Fees, LTV bands, early repayment charges, and what happens after the deal ends all play a part. Taking the time to look at total cost rather than headline rate, and getting advice from someone who can access the wider market, tends to lead to a more informed decision.