Remortgage to cut your monthly payments

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.

Get help finding the best mortgage for you

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.  

Fixed rate mortgages

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. 

Skipton Building Society, up to 60% LTV, 2.22%
Fixed until 30 June 2019 then reverts to SVR (currently 4.74%)

This is a 2.22% product, fixed until June 2019. Monthly payments are £654, giving an annual cost of £7,450. This product also comes with £1,000 cashback and is available up to 60% loan to value.

Accord Mortgages, up to 75% LTV, 1.82%
Fixed until 31 July 2019 then reverts to SVR (currently 5.54%)

This is a 1.82% product, fixed until July 2019. Monthly payments are £635, giving an annual cost of £7,476. This product also comes with £500 cashback and is available up to 75% loan to value. Accord Mortgages are only available through a mortgage broker.

Long term fixes

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.

HSBC, up to 60% LTV, 1.94%
Fixed until 30 September 2022 then reverts to SVR (currently 3.69%)

The rate is 1.94% - fixed until 2022 - and there are no fees. That’ll cost £641 a month and £7,724 each year. Our buyer will revert to a standard variable rate - currently 3.69% - 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

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.

Scottish Widows Bank, up to 50% LTV, 1.64%
Bank of England base rate (currently 0.25%) plus 1.39% for two years, then reverts to SVR (currently 3.74%)

Scottish Widows Bank currently offers the cheapest variable rate deal at 1.64%. Monthly repayments are £627 with cashback of £300; this represents an annual cost of £7,502.


While interest-only offers can be tempting, you’ll need a solid plan to pay off the capital at the end of the loan. You should also factor into your decision-making the interest you owe won’t diminish as you won’t be paying off your debt as you would with a capital repayment mortgage.

Not all providers will lend on an interest only basis, so your best bet could is likely to get a mortgage via a broker. Indicative rates can be found in our mortgage comparison tool

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Your Comments

Need to update your article regarding interest only mortgages ....Yorkshire Building Society DO NOT  offer interest only mortgages !!  have just checked with them .... so your article is misleading !!