Top 10 budgeting checks to do before you apply for a remortgage (UK)

Mortgage lenders assess affordability using your income, outgoings and employment security, and they’ll usually ask for documents like bank statements and payslips.

The 10 budgeting checks (with a “do this now” action)

1) Build a true monthly budget from your last 3–6 months

Don’t guess. Use your bank statements + bills to calculate your average monthly essentials and “life spending” (food, travel, kids, subscriptions, etc.). MoneyHelper’s budget planner recommends having payslips, bank statements and bills to hand.

Example: Your average spend might be £2,500/month, but in December and August it spiked to £3,200.

Why this matters: Lenders look for consistency. Using just one month might miss these spikes, whereas a 6-month average smooths out expensive periods like Christmas or summer holidays to give a true picture of what you can afford year-round.

2) Stress-test the mortgage payment, not just the “headline” payment

Check your budget still works if your payment rises. UK rules require lenders to consider likely future interest rate rises for affordability in many cases (stress testing for a minimum of 5 years, with key exceptions).

Example: If your new mortgage payment is £900, check if you could still afford it at £1,100.

Why this matters: Interest rates change. If your deal ends or rates rise by 2% in the future, your payment will jump. Lenders "stress test" like this to ensure you won't fall into arrears if the economy changes.

3) List every committed outgoing (the stuff you can’t “pause”)

Include: loans, credit cards (minimum payments), overdrafts, car finance, childcare, insurance, phone contracts, subscriptions, maintenance payments, etc. Lenders look at income and outgoings when deciding what’s affordable.

Example: Your committed bills (loans, car finance, council tax) might total £800/month.

Why this matters: This money is already "spent" before you even buy food. Lenders deduct this £800 from your salary to calculate your disposable income, which directly lowers the maximum mortgage they will offer you.

4) Check whether debt repayments are “hiding” in your spending

Many people forget things like BNPL instalments, PayPal credit, subscription bundles, or small direct debits that add up.

Example: A £15 monthly beauty box subscription or £9.99 streaming service.

Why this matters: It might seem small, but five or six small subscriptions add up to £100+ a month. If you don't declare these, an underwriter might see them on your bank statement and question your reliability or accuracy.

5) Confirm your “surplus” after everything is paid

Once you’ve listed essentials + committed bills, what’s left? That surplus is what protects you from rate rises, repairs, and life changes.

Example: After all bills and the new mortgage, you aim to have at least £200 left over.

Why this matters: Living on the edge is dangerous. Lenders rarely approve a loan that takes you down to your last penny because they know life happens (boiler breakdowns, car repairs) and you need a financial cushion.

6) Plan for known upcoming cost increases

If you know costs are rising soon (childcare change, insurance renewal, commuting, energy, etc.), build that into your budget before you apply.

Example: You know your nursery fees are increasing by £50/month next term or car insurance is due in June.

Why this matters: A mortgage is a long-term commitment. If a known cost is about to hit, declaring it now shows the lender you are responsible and ensures you can actually afford the loan next year, not just today.

7) Budget for remortgage fees and any early repayment charges (ERCs)

Remortgaging can come with legal, valuation and admin costs, and you may face ERCs if you end your current deal early.

Example: Your current fixed rate ends on 30 Nov 2026. Prior to that date, you might have to pay a 1-5% penalty.

Why this matters: It defeats the purpose of switching. If you save £50/month but pay a £3,000 penalty to leave early, you are actually losing money. Always check your "ERC" (Early Repayment Charge) date.

8) Check you can evidence income cleanly (and it matches your budget)

You’ll typically need proof like payslips and bank statements. MoneyHelper notes lenders may ask for current account bank statements for the last three to six months and payslips.

Example: If you are self-employed, dividends might appear quarterly, not monthly.

Why this matters: An underwriter can only lend on what they can see. If your income isn't regular or evidenced by tax documents (like an SA302), they often cannot include it, effectively lowering your borrowing limit.

9) Review your bank statements like an underwriter would

Lenders may request bank statements for several months — Nationwide says it may ask for up to 6 months, depending on circumstances.

Example: Frequent use of an unauthorized overdraft, "returned direct debits", or gambling transactions.

Why this matters: A returned direct debit tells a lender "this person ran out of money this month." If they see that pattern, they will view you as high-risk and may decline the application to prevent you from over-borrowing.

10) Make your “new payment” fit your life — not just your lender’s maximum

MoneyHelper’s affordability guidance highlights that what you can borrow depends on income, outgoings and circumstances — but your personal comfort level matters too.

Example: You might choose a 5-year fixed rate for stability, even if a 2-year tracker is slightly cheaper.

Why this matters: The "maximum" a lender will lend you isn't a target. Your peace of mind matters more. It is often better to borrow less or pay slightly more for a fixed rate if it means you sleep well at night knowing your bills are covered.

Fast next step (to turn this into a clear yes/no)

If you want a quick affordability reality-check before you apply, use the form so we can review your numbers.

Run my remortgage budgeting check →

What to include in the form (so you get a useful answer)

Current mortgage balance + deal end date
Estimated property value
Household income (and how it’s paid: salary / self-employed / variable)
Monthly committed bills + debt payments
Any upcoming changes (childcare, job change, etc.)
Your goal (lower payment, raise funds, shorter term, fixed-rate certainty)

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Frequently Asked Questions

Do lenders check my spending when remortgaging?

They usually assess affordability using your income and outgoings and often ask for bank statements as evidence.

How far back do bank statements go for a mortgage/remortgage?

MoneyHelper says bank statements are commonly requested for the last three to six months, and Nationwide says it may ask for up to 6 months depending on circumstances.

What’s the biggest budgeting mistake before a remortgage?

Focusing on the new monthly payment without stress-testing for future rate rises and real-life costs.