Can You Remortgage After a Redundancy?

The start of 2025 has seen a significant rise in both tax and the cost of living, with new research suggesting that one in four (25%) of employers are planning redundancies in the next three months.

While this statistic is shocking in its own right, facing redundancy can be a deeply unsettling experience and can have a massive impact on your mortgage.

Whether it’s unexpected or something you’ve been anticipating, many people are now looking to remortgage in order to decrease their monthly costs, extend their mortgage term, or access equity.

But can you remortgage after a redundancy?

While the direct answer to that question is no, the good news is that you may still be able to secure a product transfer with your current lender.

In this article, we’ll walk you through how a redundancy will affect your mortgage and how you can manage your mortgage through a redundancy. Let’s jump in.

What Is the Difference Between a Remortgage and a Product Transfer?

Simply, a remortgage would involve switching mortgages to a different lender. Whereas, a product transfer will allow you to switch your current mortgage product, but only with the same lender. This is very important to note when asking if you can remortgage after a redundancy.

Redundancy will drastically impact your financial profile and will shift your employed status into unemployment. As a result, it is highly unlikely that a new lender would allow you to remortgage, for fear that you would not be able to reliably repay your mortgage loan.

With that being said, your current lender may offer you a product transfer. A product transfer is a way to explore options/changes to your current mortgage. This could include opportunities such as the latest deals from your chosen lender, or alterations like an extended mortgage term to lower the monthly repayment costs.

How Will Redundancy Affect Your Mortgage

One of the biggest concerns for homeowners who are facing redundancy is understanding how their mortgage will be affected – and rightly so.

Primarily, it is all about your financial standing and how the loss of your job will affect your ability to repay any ongoing mortgage payments.

When you’re made redundant, there will inevitably be a shift in your affordability. For lenders, this shift will mean that you would likely become a high-risk borrower. As such, it is unlikely that you would be able to remortgage and lenders will want to ensure that you can still maintain your monthly repayments.

Understanding this shift in perspective from the lenders can help you take a more strategic approach to managing your mortgage in the face of redundancy. Whether it’s contacting your provider early, exploring alternative income options, or working with a broker, there are ways to navigate this period with more control.

Can You Remortgage After Redundancy?

As we outlined in our introduction, securing a remortgage after a redundancy is incredibly difficult and unlikely. However, there are still options available to you that can help you manage your mortgage.

While there are many caveats to the best practices, much will depend on your current financial status and how well you can demonstrate your ability to afford your mortgage repayments moving forward.

Similar to your first mortgage application, lenders will want to assess several key areas, including:

• Your current income
• Your savings
• Your payment history
• Any outstanding debts

The primary concern of your lender is to ensure that you will be able to consistently make your mortgage repayments moving forward.

Should you have a history of consistently making mortgage payments and have managed your finances responsibly, this will naturally work in your favour. If you can demonstrate that your current financial hardship is temporary and that you have plans in place to manage this, some lenders will be more flexible when it comes to product transfers.

How Do You Manage Mortgage Payments After a Redundancy?

Unfortunately, for many, redundancy will leave them unable to keep up with their mortgage payments. But – you still have options.

One of the first steps you should take is to speak directly with your lender. Many lenders will have a support system in place that can help you temporarily throughout financial hardship.

Generally, lenders (or mortgage advisers) will explore four key options:

Mortgage Payment Holiday

Introduced during the COVID-19 pandemic, a mortgage payment holiday allows you to simply pause your monthly repayments for a short period. This will typically be up to three months.

If you’re temporarily without funds and have income lined up in the near future, from another job for example, this can provide some much needed breathing space while you navigate your new employment.

However, it is important to note that a mortgage payment holiday will appear on your credit file, and can potentially affect your overall credit score and future borrowing ability.

Arrears Consolidation

Mortgage arrears occur when you miss repayments on your mortgage loan. If you’re going through temporary financial hardship, your lender may allow you to consolidate these arrears into your existing mortgage.

This essentially means you spread the cost of your missed payments across the remaining term of your mortgage, and can make your monthly payments more manageable.

Mortgage Term Extension

Extending your mortgage term can directly lower your monthly repayments and can be a great method of managing your mortgage repayments.

Switching mortgage products to extend your mortgage term could provide a long-term solution to your affordability concerns. However, it should be noted that by doing so, you will inevitably increase the total interest you will be paying over the lifespan of the loan.

Switch to an Interest-Only Mortgage

Some lenders might agree to temporarily switch your mortgage to an interest-only mortgage. This would help reduce your monthly payments significantly, as you would then only be paying the interest, and none of the capital.

While this is not a permanent fix, it can provide you with some breathing room to arrange further plans or to line up other income opportunities, such as new employment or self-employed work.

Should You Remortgage Before Redundancy?

The key takeaway here is about timing – it is always better to be proactive when your financial standing is strong.
For most, salary income will be the primary way of repaying a mortgage loan. Any changes to this will likely have a massive impact on your ability to remortgage.

The best practice is to act when your financial standing allows you to access the best mortgage products and rates, helping you to save money both early on and in the future.

Remortgaging while your finances are consistent and stable can grant you access to a host of benefits, including more favourable rate, extended term time, or even reduced monthly payments.

Planning your finances ahead of time can ensure that during any unforeseen periods of financial struggle, you will still be able to keep up with your monthly repayments.

It goes without saying, employment status is a major factor in any mortgage applications. Having a reliable income will make lenders look at you more favourably as a borrower, consequently, offering more competitive deals at competitive rates.

As such, while redundancy is an unpredictable occurrence, it is always best to be conscious of your finances and mortgage loans while you’re in a position of power. By applying for a remortgage while your financial situation is comfortable, you will be able to start saving, creating a financial buffer – just in case your circumstances change.

An example of this in practice might be:

1. You’re worried about facing redundancy or your finances in the future.
2. You choose to remortgage to a longer term in order to lower your monthly payments for a few years, freeing up some of your finances to save.
3. In the scenario that you’re made redundant, you can fall back on those savings until you’re back in a secure financial position. At which point, you can look to remortgage again, to find a mortgage plan that best suits your current financial standing.

This method is much like an allegory of ‘saving for a rainy day’.

There’s always a risk of acting too late. As such, being proactive and speaking to a broker early can make all the difference.

At Boon Brokers, we can help assess your financial situation against the most up-to-date mortgage products on the market today, and can help advise you on the next best steps – tailored to your situation.

What Should You Do If You’re Made Redundant During Your Mortgage Application?

Being made redundant in the middle of a mortgage application can be especially difficult as mortgage offers are generally based on your financial and employed status.

Importantly. lenders reserve the right to withdraw any mortgage application if there are any changes to the borrower’s financial standing. It is likely that something as significant as a redundancy would cause your mortgage application to be refused.

However, a lender might pause the application process until you can show renewed financial stability. In others, they may be willing to continue based on savings, redundancy pay, or other income streams.

If you choose not to inform your lender, you risk not only the initial mortgage offer being withdrawn, but can potentially face serious consequences.

The key is honesty and transparency. If you’re facing redundancy during your mortgage application, there are 3 steps that you should follow:

The 3 Steps to Improve Your Mortgage Application After Redundancy

Trying to secure a mortgage application if you feel at risk of redundancy can be stressful, especially if you’re unsure on what information you need to provide.

The good news is that there are 3 clear steps that can help:

1. Contact a Mortgage Broker

   Contacting and working with a trusted mortgage broker like Boon Brokers can help you connect with lenders that are more flexible and understanding of your situation. Additionally, we will provide you with a dedicated mortgage expert who can help guide you through the entire application process, including the what, when, and hows of all the information you will need to provide.

   The best thing? We’re a completely fee-free mortgage advice service, so you don’t need to worry about additional fees in a time of potential financial difficulty.

2. Update Your Information

   Your chosen broker or lender will need the most up-to-date and accurate financial information. Making sure that your application includes your latest bank statements, savings, any other forms of income, and redundancy payout details if applicable. The clearer your paperwork, the easier it is for your dedicated broker to find the best mortgage match for you.

3. Trust Your Broker

   It’s simple: your broker is there to guide you through the process. They know which lenders are more flexible and what criteria are most important. Trusting their experience and expertise will make your mortgage journey as stress-free as possible.

Crucially, redundancy is likely to make your mortgage application more difficult to secure the best rates and products that are on the market today, and taking these steps will not guarantee your mortgage applications approval. However, working with an expert mortgage adviser can dramatically improve your odds, especially when working with someone who knows the mortgage market inside out.

Contact a Expert Mortgage Adviser Today

Being made redundant is never easy, and dealing with mortgage concerns on top of that can start to feel overwhelming. But with Boon Brokers – you don’t have to face it alone.

At Boon Brokers, we’re a fee-free mortgage broker with whole-of-market access to 90+ leading lenders, including specialists who understand the nuances of redundancy and income changes.

Whether you’re seeking to remortgage, transfer your product, or simply want a better understanding of your options, we’re here to support you every step of the way.

Contact Boon Brokers and arrange a fee-free, no obligation meeting with your dedicated mortgage adviser, and manage your perfect mortgage today.