Remortgaging. It’s a word that’s increasingly being discussed in homes throughout the UK. Put simply, remortgaging is when you change your mortgage deal to a new lender or a different product with your existing lender. No longer is it just about finding a better interest rate; it is an essential financial tactic to stay ahead of rising monthly costs, access equity, or adapt to life’s twists and turns.

Remortgaging is currently in the spotlight as several factors have converged to shape today’s housing market. Interest rates have been creeping upward, squeezing already strained household budgets due to the cost-of-living crunch. 

We’ll delve into statistics from the Bank of England, the FCA, Mortgage Strategy, and others to help fill in the gaps, ultimately showing you exactly what’s happening with remortgaging in 2025.

Market Forecast: £216 Billion Mortgage Market in 2025

The UK mortgage market is slated to reach an impressive £216 billion in total lending by 2025, according to Mortgage Introducer. That includes everything from buying a brand new home to remortgaging, but here’s the kicker: remortgaging alone is expected to make up a full £58bn of that figure. That’s nearly 27% of the overall mortgage lending market, a significant slice that should tell you just how crucial remortgages have become.

There are numerous forces behind this jump. For one thing, there are large numbers of homeowners coming to the end of fixed-rate deals they took out when interest rates were at all-time lows, and who are, by now, sold on the idea that mortgage finance is significantly cheaper than it used to be. In addition, continued inflation and increased cost-of-living pressures are prompting borrowers to seek ways to reduce their monthly payments or tap into their home equity.

From a policy perspective, we’re also seeing the impact of regulatory changes designed to introduce competition between lenders, as well as an economy that is considered cautious but optimistic. This combination of economic and policy pressures means that not only is remortgaging a necessity for many, but it also presents an opportunity for the more astute homeowner to take control of their finances in a mismatched market.

Fixed-Rate Expiries in 2025: Borrowers Facing Steep Increases

According to the Financial Times, millions of UK borrowers are set to see steep increases in repayments in 2025 as their ultra-low pandemic-era fixed rates expire. At the end of February 2025, average five-year fixed mortgage rates had risen to 4.39%, compared with around 1.7% in 2020, meaning many households face significant jumps in monthly costs as they move off historically cheap deals.

What does that actually look like? For many borrowers, it’s a surprise waiting to happen. After their fixed deals end, their rates will reset to higher variable rates, or they will have to find new fixed-rate deals at today’s much higher interest rates. This “payment shock” could lead to a sharp rise in monthly outgoings, often by hundreds of pounds.

Surge in Gross Mortgage Advances

Recent statistics from the Bank of England indicate a sharp increase in gross mortgage advances. Gross mortgage advances increased by 12.8% between Q4 2021 and Q1 2025, reaching £77.6bn in Q1 2025. This is the largest quarterly improvement since Q4 2022 and represents a significant 50.4% increase over the same quarter last year.

What’s behind this surge? It’s driven in large part by the remortgaging activity itself. Much of this is being driven by borrowers seeking to avoid higher rates, or considering re-mortgaging, alongside first-time buyers and home movers capitalising on competitive deals.

Mortgage product switching is another major factor, with lenders vying aggressively to entice customers with fresh deals, cashback offers and lenient terms. This competition has created a dynamic environment where homeowners feel empowered to shop around and potentially save on their mortgage or secure a better deal.

All of this adds up to a booming mortgage market, with a lot of borrowing and remortgaging taking place, keeping both lenders and borrowers very busy.

Outstanding Residential Mortgage Balances

In addition to increasing mortgage advances, the outstanding balance of residential mortgages, the sum still owed on all residential mortgages in the UK, continues to rise. It now amounts to £1,698.5 billion in early 2025, a 1.2% rise from the previous quarter, and 2.6% higher on an annual basis, the FCA says.

This sustained expansion tells us a few things about household borrowing behaviour. First, many homeowners are saddled with larger debts than in previous years, likely due to soaring property prices in recent years, as well as borrowers’ tendency to take out bigger loans to cover deposits and fees. It also suggests that while some households will tighten their belts in response to rising rates, others will draw on equity or restructure their debt through remortgaging.

It has also put the spotlight on the amount of money Britons owe on their mortgages, suggesting that this type of debt remains an essential part of households’ financial situation, and many have to buy a home on borrowed money. It is a trend to watch because it has implications not only for individual households but for the larger economy in terms of spending, saving and financial stability.

What’s Driving the Remortgaging Boom?

So what’s behind this remortgaging boom that everyone is talking about? It’s a cocktail of things all melding at once. Recent interest rate rises have prompted borrowers who came off their historically low fixed deals to shop around for new deals that more accurately reflect today’s conditions. At the same time, many fixed-rate terms are coming to an end, resulting in a rush of mortgage reviews and switches.

Inflation has continued to be a thorn, squeezing household pocketbooks and prompting people to seek methods to reduce their monthly expenses. Lender competition has been fierce, with banks and building societies offering a range of deals to attract business, and some providing cashback and flexible payment options. This bodes well and provides more options for homeowners (to switch and save).

Industry experts forecast that remortgaging volumes will rise by about 30% in 2025, reaching approximately £76 billion of lending. This level of activity implies that borrowers aren’t merely reacting out of need; they’re actively shopping around in search of the best terms, sometimes even before their current deals have expired.

Mortgage brokers are seeing more clients inquire about remortgaging sooner than they might have in the past, reflecting a cautious and savvy mindset in today’s market.

Implications for Homeowners

This wave of remortgaging presents a blend of challenges and opportunities for homeowners. Soaring numbers are now waking up to the challenging new reality of more expensive monthly bills as their fixed-rate deals come to a close and they scramble to make crucial decisions. Should they remortgage straight away, lock in another fixed-rate deal, move to a variable rate, or consider downsizing or consolidating their debt?

Timing is everything here. Holding out can result in losing access to competing deals, and rushing a decision could lead to less favourable terms. For some investors, uncertainty about future interest rates is a significant concern, making it challenging to determine when to act. However, the real message here is that being proactive, asking for advice, and shopping for rates can make a significant difference.

Mortgage brokers are seeing an influx of homeowners exploring their options, and many are using online calculators. These calculators can serve as a way to at least ballpark what you expect to pay in the future, shining light on the expense or savings. The bottom line? Remortgaging isn’t just about saving money; it’s also about achieving stability and flexibility in a rapidly changing financial world.

Conclusion

The UK mortgage market is undergoing rapid change, with remortgaging at its heart. Fixed-rate expiries, increasing interest rates, and a tightening lending market are forcing homeowners to reevaluate their mortgages more than ever.

For many, this entails both payment shocks and opening doors to new opportunities, whether that’s reducing monthly costs, tapping into equity, or finally securing a deal that best fits their lifestyle. The growth in mortgage advances and the stock of balances serves as evidence that borrowing remained a central part of the UK housing story.

Whether you’re nearing the end of a deal as a homeowner or simply interested in what’s available, now may be the perfect time to explore remortgaging. With the right advice and tools, you can flip what should feel like a financial hurdle and make it a smart move for your future.

Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

There may be a fee for mortgage advice. The precise amount will depend upon your circumstances and will be agreed with you before proceeding, but we estimate it will be £395.

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