Day 1 Remortgages

Buying a property is a huge milestone, but sometimes, you need to move quickly when it comes to your mortgage options. That’s where a Day 1 remortgage comes in. Unlike traditional remortgages that require you to wait six months before refinancing, a Day 1 remortgage lets you remortgage straight away. 

Whether you’ve bought a property with cash, inherited a home, or used a short-term finance option like a bridging loan, this guide will help you understand how Day 1 remortgages work and whether they’re the right choice for you.

What Is a Day 1 Remortgage?

A Day 1 remortgage is exactly what it sounds like: a remortgage that can happen from the day you take ownership of a property. Some lenders usually insist that you own a property for at least six months before they’ll let you remortgage, but others are more flexible - the key is knowing which lenders to approach who can help.

If you’ve bought a property outright or secured it using short-term finance, a Day 1 remortgage can help you access the property’s equity or switch to a more suitable mortgage deal straight away.

How Do They Work?

A Day 1 remortgage follows a similar process to a standard remortgage, but with some key differences:

• Eligibility Check: Lenders will assess your financial situation, income and outgoings, credit history, and the property’s value.

• Valuation: A surveyor will carry out an independent valuation to confirm the property’s market worth.

• Proof of Ownership: If the Land Registry has not yet been updated with your details, you'll need to provide other evidence that you own the property. A letter from the solicitor who helped complete the purchase is usually sufficient.

• Evidence of how you acquired the property: Proof of cash payment (if bought using savings), solicitor’s confirmation of inheritance (if inherited), auctioneers invoice (if bought from a property auction)

• Approval & Fund Release: Once approved, the new mortgage funds will be released, allowing you to repay any short-term finance or access equity as needed.

Why Would You Need a Day 1 Remortgage?

There are plenty of reasons why someone might need a Day 1 remortgage, including:

• Releasing Equity Quickly: If you’ve bought a property below market value or with cash, a Day 1 remortgage lets you access some of that investment for other uses.

• Refinancing Short-Term Loans: If you used a bridging loan or another form of short-term finance to buy the property, remortgaging straight away can help you secure a lower interest rate.

• Renovation & Development: If you’re planning to refurbish a property before renting or selling, a Day 1 remortgage can provide the funds to get started sooner.

• Transferring Ownership: If a property was inherited or gifted, remortgaging can help release funds to distribute among family members or cover inheritance tax.

How Long Does a Day 1 Remortgage Take?

A standard remortgage typically takes 4-8 weeks to fully complete, and a Day 1 remortgage follows a similar timeframe. However, if your situation is more complex (for example, if your earnings history isn't straightforward or the property needs a more in-depth valuation), the process could take a little longer.

What Are the Benefits of a Day 1 Remortgage?

A Day 1 remortgage can be a great idea for the following reasons:

• Access equity fast: If your money is tied up in a property, remortgaging can release funds quickly.

• Lower interest rates: If you’ve used a short-term loan, remortgaging can help you move onto a more affordable, long-term mortgage.

• More financial flexibility: Whether you need money for another investment, renovations, or personal reasons, a Day 1 remortgage can help you access cash without selling up.

When Is It a Bad Idea?

While a Day 1 remortgage has its benefits, it’s not always the best move. Here are some situations where you might want to reconsider:

• High fees and interest rates: Some lenders charge higher fees for Day 1 remortgages compared to standard remortgages. Make sure the costs don’t outweigh the benefits.

• Your credit score isn’t great: If your credit score is low, you may struggle to get a good deal. It might be worth waiting and improving your credit before applying.

• Short-term financial uncertainty: If your financial situation is unstable, taking on a new mortgage straight away might not be wise.

• You don’t need the money immediately: If you don’t have an urgent need for funds, you might be better off waiting for more competitive mortgage options.