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Mortgage Advisor & Director
Most mortgage lenders will expect you to have owned your property for six months before you can remortgage, but did you know it’s possible to refinance on completion of your purchase? This is called a day one remortgage.
In this guide, you will learn how day one remortgages work, why you might need one, and how we can help you get it done on the best possible terms for you.
What is a day 1 remortgage?
A day one remortgage is when a homeowner remortgages their property right after buying it. Most mortgage lenders won’t let you refinance until you have owned the property for six months, and some set the bar at 9-12 months; but there are lenders who would be willing to offer you a remortgage right after the completion of your original mortgage.
Although it is possible to begin a remortgage application with some lenders on the day of completion, the term ‘day one remortgage’ can refer to refinancing a property at any point before that six-month mark, as many lenders who will let you remortgage early would be willing to get the ball rolling on your application on the day you complete the purchase.
Since the number of available lenders can be restricted and there are additional requirements to be aware of, it is recommended that you use a mortgage broker if you need a day one remortgage. At Teito, we have advisers who specialise in this very area.
How do they work?
Day one remortgages - sometimes known as back-to-back remortgages or same-day remortgages - work in almost the same way as a standard refinance application, but with a few extra steps in the process and some specific criteria to be aware of.
One of the main differences is that you will need to prove your ownership of the property, since your name is unlikely to be listed on Land Registry’s database so soon after purchase. This would usually be done through the solicitor you used when buying the property.
Read on to find out why you might need a day one remortgage and how to qualify for one.
Why would you need a same-day remortgage?
These early remortgages can be used by residential homeowners or buy-to-let landlords for a number of different purposes. They are most commonly approved for the following:
- To expand a property portfolio: This is perhaps the most popular use for them among landlords. Being able to refinance on day one allows landlords to release equity to buy other properties and build/expand a portfolio quickly.
- Inherited or gifted properties: Often when someone is gifted or inherits property, they want to raise capital against it quickly, which a day 1 remortgage can facilitate.
- Renovating a recently purchased property: Some homebuyers use day one remortgages to renovate a fixer-upper property. Perhaps you have bought a dilapidated home with a mortgage and now need funds to make it livable.
- To exit from a bridging loan: If you used specialist finance such as a bridging loan to buy your property, you will want to remortgage to exit onto a standard residential agreement as soon as possible, as the rates on products like bridging loans are high.
- Cash buyers: Those who bought a property with cash often choose to refinance quickly to release equity. It might also be possible that you borrowed some cash from a friend or family member to complete the purchase, and want to pay them back.
Expect your lender to ask you why you want to remortgage so soon after buying your property. The above scenarios are likely to be universally accepted.
Eligibility criteria
The eligibility requirements for a day one remortgage are generally the same as a regular remortgage, but with some additional criteria. The requirements are as follows:
- Proof of ownership: Some lenders will only approve a remortgage if you are named as the property owner on Land Registry. Other lenders, however, will accept proof of purchase from the solicitor you used when you took out your original mortgage.
- LTV requirements: The maximum loan-to-value (LTV) ratio for day one remortgages can be lower, with some lenders setting it at 75-85%. This means you will need at least 15% equity in your property, but a few lenders will stretch to 95% LTV.
- Credit history: You will have more lenders to choose from if you have clean credit, as those with bad credit are sometimes limited to specialist lenders.
- Age: Some lenders won’t offer you a day one remortgage if the mortgage term will run beyond your 75th birthday, but others stretch to 85 or older.
- Landlord experience (BTL only): If you are a buy-to-let mortgage holder and need a day one remortgage to release equity to expand a property portfolio, you will likely have more options to choose from if you have some landlord experience.
How to get a day one remortgage
Before you get started, it’s a good idea to have proof of property ownership to hand, whether that is from Land Registry or the solicitor you used for your original purchase.
You have two choices for how to proceed after this. You can use our free rates comparison service to browse the latest day one remortgage deals on the market, or you can select the option to enter a free, no-obligation chat with a broker who specialises in remortgages.
Select the option that best suits your personal preferences below:
Find the best day one remortgage deal on Teito
Which lenders are available for this?
Below you will find examples of the lenders who offer day one remortgages and some of the specific requirements they have for them:
- Barclays: Will allow property owners to remortgage as soon as they are registered as the property proprietor on the Land Registry database.
- HSBC: Will allow property owners to remortgage right after competition as long as their solicitor states in writing that they are the legal owner and that the property was not purchased via a sub-sale style transaction.
- Livemore Capital: Will only allow day one remortgages if the property owner does not wish to release any equity when they refinance.
- Coventry Building Society: Will consider day one remortgages as long as the applicant is living in the property at the time of application.
- Nationwide: Considers back-to-back remortgages on a case-by-case basis.
- Santander: Will consider day one remortgages as long as the applicant is living in the property at the time of application.
There are currently around 27 lenders available for same-day remortgages.
Why choose Teito for your remortgage needs?
On Teito you can compare the latest day one remortgage deals and access support from a mortgage broker who specialises in this type of niche lending.
Here are just some of the reasons people choose us for their day one remortgage:
- You can compare the latest remortgage rates for free
- Our brokers specialise in day one remortgages
- We are 5-star rated on leading review websites
- You can secure a mortgage in principle in minutes
Ready to compare rates and take advantage of a free, no-obligation chat with a broker who specialises in day one remortgages? Get started here.
FAQs
Although the lenders that offer them will allow you to begin your application on day one after completion, it can take between 24 hours and two weeks for it to be officially approved.
Beyond this, the rest of the process will take roughly 12 weeks to be fully finalised, but you can potentially save time by applying for your day one remortgage through a broker.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.