Updated: February 18, 2022

Day 1 Remortgages

Need to remortgage straight after buying? A Day 1 remortgage might be your answer! Find out what they are & which lenders offer them in our in-depth guide.

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: February 18, 2022

Wanting to remortgage your house straight after buying it might sound unusual, but there are legitimate reasons for doing so. Day one remortgages are designed to meet this need.

This guide will explain what these products are, how you can remortgage early, and why you should speak to a broker for expert advice if you’re thinking about refinancing your home.

What are day one remortgages?

A day one mortgage, similar to a back-to-back mortgage, is designed to let someone remortgage a house they own immediately after completion. It refers to any remortgage application made during the first six months of ownership, even one day after buying a property.

Generally, most lenders won’t consider remortgaging your property if you purchased it within the last six months. Some may expect you to have owned it for at least 12 months before considering your application.

This six-month mortgage rule was introduced after the 2008 financial crisis to stop dubious practices, such as customers buying a property for less than it was worth — either through a forced sale at auction, or by paying cash under-the-table — and then remortgaging for its full value. These schemes led to homeowners falling into negative equity, or banks repossessing properties that were worth less than what they’d lent.

But there are legitimate reasons why someone may want to remortgage soon after completion. So if you need to do this, there are specialist lenders who will consider your application, as long as you can prove the original purchase.

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How do they work?

Day one remortgages work just like traditional remortgages. The main difference is you will need to verify you own the property, as your name may not yet appear on the Land Registry. It can take four to six weeks to update, or even longer.

If your name is not listed on the Land Registry, the solicitor you used when purchasing can help confirm your ownership. Most lenders will offer a loan-to-value (LTV) for your next day remortgage of between 75%-85%, but some will go up to 95% and a few may go as high as 100% in exceptional circumstances.

Before you apply, it’s important to check whether your existing mortgage has an early repayment charge, which can range from 1% to 5% of the borrowed amount — replacing your mortgage early can be expensive if these charges are applied.

A broker can help you decide if remortgaging is the best route for you to take. The brokers we work with offer complete transparency about what’s in your best interest, even if this means staying with your current lender.

Why would someone want a next day mortgage?

There are several reasons why someone might need to do this.

For instance:

  • You bought the property using cash, perhaps through an auction or before anyone else could make an offer, and now you want to release equity. Maybe you borrowed cash from family or friends and need to pay them back.
  • You inherited a property or received one as a gift, and you want to borrow money using the house as security.
  • You’re renovating a property or making home improvements, and need to raise more cash.
  • You’ve bought a property that isn’t habitable, like a barn conversion, using cash or a bridging loan, and now want to refinance with a regular mortgage.
  • You’re a landlord who bought a property using cash, and now want to release money to buy another property.

How to get a day one mortgage step-by-step

The application process is similar to a regular remortgage, but to get your day one remortgage application off to the best start, follow these steps:

    1. Get evidence of your ownership: If the Land Registry has not yet been updated to show your name on the title deeds, you will need alternative proof of ownership. The solicitor you used when you bought or inherited the property will be able to provide confirmation of when you became the owner and what price you paid.
    2. Update your paperwork: During the original purchase, you would have provided payslips, proof of income and proof of address. These will now likely be out of date, so you will need to gather the most recent documents. Check what other papers you might need in our guide to mortgage applications.
    3. Double check your credit score: Before applying to remortgage, check your credit report to make sure it is accurate and up to date, ideally with your new address and current mortgage. We have a dedicated hub where you can download your credit report.
    4. Speak to a broker: Because day one remortgages are niche products, you should talk to a specialist mortgage advisor. They will know the right lender for your situation and can guide you through the application process, boosting your chances of success.

Our free broker-matching service can assess your needs and circumstances and pair you with a broker who is best placed to help you — make an online enquiry today.

How quickly can you get a remortgage?

It normally takes two weeks to approve a mortgage application, as the lender will need to value the property. In rare cases, it can be done in just 24 hours.

But that’s just for approval. The average time for a standard application from offer to completion takes around 12 weeks, but the process may take longer if you have bad credit, or the property is built from non-standard materials.

Getting your documentation together in advance can speed things up. An advisor can also help save you time with the paperwork, or help you apply for a fast-track mortgage.

Which lenders offer next day mortgages?

Several lenders offer day 1 remortgages, including high street names like Natwest, Nationwide and Barclays.

However, most lenders have strict criteria on whether they will consider an application, depending on your situation. They will likely want your solicitor to prove you own the property. Some lenders also have rules that if the property was bought for less than its market value, such as at auction, they will only remortgage up to its purchase price.

Given all these different criteria, speaking to a mortgage expert who knows which lender is best for your situation can boost your chances of approval.

How to get the best interest rates

There are lots of factors that could impact how expensive the interest rate on a day one remortgage will be. These include:

  • Credit history: A bad credit score can harm your application and may lead to a higher interest rate. Some lenders may reject you if you have a poor credit history, but others will still consider you.
  • Equity: How much of your property do you own? Borrowers with a lower LTV usually get better rates.
  • Property type: Some lenders will reject applications where the house is unusual, such as a listed property, because these are seen as higher risk. But other lenders will consider non-standard properties.

Speak to a remortgage broker

If you’ve inherited a property or used all your cash to buy a home, a day one remortgage can help you release equity and recoup those savings.

It’s worth speaking to a broker who specialises in remortgages, as they can help you find the best deal, match you with the right lender, and save you time and money. For a free initial consultation with no obligation to go further, call us today on 0808 189 0463 or make an enquiry.

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We can help! We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in Remortgages Ask us a question and we'll get the best expert to help.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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