The best remortgage deals starting at 1.49% for May 2022

Getting the best remortgage deal is vital when looking for affordable or cheaper mortgage repayments – here’s how to find the right deal for you.
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  • Remortgaging means taking out a new mortgage to pay off your existing one. By doing so you can reduce the amount you pay each month.

    According to Moneyfacts, there are more than 3,700 remortgage deals available right now. To find the right remortgage product for you, you’ll need to look at both the interest rate and product fees.

    Aaron Strutt, product and communications director at Trinity Financial, says: ‘If your mortgage rate is coming to an end and you’re looking for a new deal, it is worth shopping around to make sure you are getting the most competitively priced rate.

    ‘The lenders regularly offer different products for new and existing customers, and existing customers often end up paying more. By shopping around, you get to know what’s on offer and if you really are getting the best deal.’

    Most people remortgage when their fixed rate comes to an end. If you don’t switch mortgages when a fixed rate expires, you’ll find your payments go up as you’ll be moved to your lender’s standard variable rate (SVR).

    blue terrace house

    Image credit: David Parmiter

    The Bank of England base rate has gone up a couple of times lately, and could rise further. This makes getting the best remortgage deal even more important.

    To get the best mortgage deal, you need to compare rates and get your calculator ready to do some sums.

    David Hollingworth, associate director at London & Country Mortgages, says: ‘Shopping around for a new mortgage deal makes a lot of sense. As the single biggest outgoing the potential savings on the mortgage payment could amount to thousands per annum compared with a lender’s standard variable rate.

    ‘There can be plenty of variation between deals in the market as well so looking for the best deal at the right point in time can also help to drive down monthly payments even more.’

    Best remortgage products May 2022

    Lloyds Bank –10-year fix with cashback

    Rate – 2.23%

    Type – fixed

    Duration – 10 years

    Minimum deposit – 40%

    Mortgage fee – £999

    Cashback – £250

    Cashback only applies if you have a Lloyds current account. If you want to repay the loan early, penalties will apply until 31/8/2032.

    HSBC – five-year fixed

    Rate – 2.36%

    Type – fixed

    Duration – five years

    Minimum deposit – 25%

    Mortgage fee – £1,499

    Overpayments allowed. Early repayment charges apply until 31/7/2027.

    Barclays – three-year fixed

    Rate – 2.25%

    Type – fixed

    Duration – three years

    Minimum deposit – 40%

    Mortgage fee – £999

    Overpayments allowed. Available to first-time and second-time buyers, and remortgagers.

    First Direct – two-year fixed

    Rate – 2.29%

    Type – fixed

    Duration – two years

    Minimum deposit – 25%

    Mortgage fee – £490

    Free valuation and legals on remortgages.

    First Direct – two-year fix no fee

    Rate – 2.59%

    Type – fixed

    Duration – two years

    Minimum deposit – 20%

    Mortgage fee – £0

    Overpayments and drawdown allowed. No arrangement, valuation or legal fees.

    West Brom Building Society – variable rate with low equity

    Rate – 2.04%

    Type – discounted variable (SVR minus 2.05%)

    Duration – two years

    Minimum deposit – 10%

    Mortgage fee – £999

    Discount collar of 1.74% applies, so you won’t pay less than this regardless of what interest rates do.

    Cumberland Building Society – discounted variable

    Rate – 1.49%

    Type – discounted variable (SVR minus 3.25%)

    Duration – two years

    Minimum deposit – 25%

    Mortgage fee – £1,999

    Cashback – £100

    Cashback only applies if you have a Cumberland current account or switch your main current account to the Cumberland.

    Progressive Building Society – discounted variable rate no fee

    Rate – 1.54%

    Type – discounted variable (SVR minus 3.46%)

    Duration – two years

    Minimum deposit – 5%

    Mortgage fee – £0

    Discount collar of 0.5% applies, so you won’t pay less than this regardless of what interest rates do.

    How to find the right remortgage deal

    You can search online for the best remortgage rates using a price comparison website.

    By submitting basic details such as your annual salary, how much your home is worth and how much you want to borrow, you’ll find the best remortgage deals.

    Alternatively, you can ask a traditional mortgage broker to search for the best deals on your behalf. After a fact-finding phone call or meeting, they will select the best deals for your circumstances rather than just the lowest rates.

    white table with laptop and orange lamp

    Image credit: David Merewether

    ‘It’s easy to be drawn to the lowest interest rate but there can be other costs that need to be factored in. For example, some deals may have a low rate but carry a big arrangement fee whereas others may offer a slightly higher headline rate but carry no fee and add in other incentives such as a free valuation and a cashback,’ says David.

    Do the sums

    You’ll need a calculator to work out the best remortgage deal. Add together the monthly payments for the length of time you are tied in for (normally the duration of a fixed rate) then add the product fee, and minus any cashback.

    For example, if you wanted to borrow £200,000 on a two-year fixed rate at 2.29% over 20 years with a £490 fee, it would cost you a total of £25,437 over two years (24 monthly payments of £1039.46, plus £490).

    You should do the same calculation for other deals you’re considering, then compare the total figures.

    When looking at remortgage deals, you’ll need to understand your loan-to-value (LTV). This is how much of your property’s value you need to borrow as a mortgage. When you remortgage, the ‘deposit’ required is actually the equity in your property.

    For example, if your house is valued at £200,000 and you need to borrow £150,000, this means you have a deposit/equity of £50,000 (25%) and you can apply for remortgage deals with a maximum LTV of 75%.

    ‘If you are planning to lock into a longer-term fix, it is even more important to ensure you are getting the best deals. There is no point in paying more than necessary for a fixed-rate mortgage you’ll have for five or 10 years,’ explains Aaron, ‘Many borrowers tend to stick with their existing lender rather than switch to another bank or building society because it is easier, but at a time when rates are rising this is not always a good idea. Many of the people we speak to change lenders if the rates they are being offered are uncompetitive, or they are trying to borrow more money to fund home improvements or debt consolidation.’

    All rates are correct as of 6/5/2022 but are liable to change due to the Bank of England base rate announcement on 5/5/2022.

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