Switching mortgage provider FAQs
What fees are involved with changing mortgage providers?
There are a number of fees involved with remortgaging your property, namely:
Exit fees - Also known as a deeds release fee or mortgage completion fee, this is charged by some lenders to close your mortgage account. This charge typically applies no matter whether your deal has ended or not.
ERC (Early Repayment Charges) - Unless you're on your lender's SVR, you're likely to need to pay ERCs to leave your mortgage deal. This is generally charged as a percentage of what you still owe and can be very costly, especially if you have years remaining on your current deal.
Arrangement and booking fees - Not all lenders charge arrangement fees, but some banks and building societies will do.
Valuation and conveyancing - Your new lender will instruct a new valuation to gauge the current value of your property. Solicitors will also still have to carry out conveyancing and deed changes on your behalf, much like when you took out your original mortgage.
Many lenders offer fee free remortgages as an incentive to switch to them, meaning that valuation and legal fees won't always apply. Remember to compare mortgage deals across the market to make sure you get the best terms for your circ*mstances!
Is it worth switching mortgage providers?
It really depends on your exact circ*mstances. There are a lot of factors that contribute to whether or not a remortgage is right for you, and timing is key to this.
Switching to a new deal can save you money on interest, afford you more flexible terms, such as the ability to overpay, or even allow you to borrow more, but this won’t be true for everyone, so it’s important to fully understand your choices.
If you’re unsure, speaking to a knowledgeable online mortgage adviser can help you make the right decision for you.
How long does it take to switch mortgage providers?
A typical remortgage takes around four to eight weeks to complete, however, it can be slightly quicker or take longer than this, depending on the complexity of the case.
If you’re simply transferring your mortgage to a different deal with the same lender (a product transfer) it is usually much quicker.
Can you switch your mortgage at any time?
You won’t usually be able to remortgage or do a product transfer within the first six months of taking out your mortgage, but you have the choice to switch mortgages at any point after that.
Remember that if you are currently in a fixed-rate mortgage deal or within the introductory rate period on a tracker or discount deal, you will likely have to pay ERCs (early repayment charges) to leave the deal before the term has ended, however.
How is my property valued when I switch my mortgage rate?
When you switch mortgage providers, the new lender will want to do a full valuation of your property, similarly to the one that was carried out before you bought it. This is to determine its current market value, which may have risen or fallen since your purchase.If you opt for a product transfer with your existing lender, they won’t usually need to do a new home valuation.
Can I switch to a new mortgage deal and change my term at the same time?
Yes it’s possible to change your terms in a number of ways when you remortgage, for example, you might want to switch from an interest-only to a repayment mortgage, from a fixed-rate to a tracker rate, or to a deal with more flexible terms, such as an offset mortgage.
It’s even possible to change a residential mortgage to an investment rental property by remortgaging to a buy-to-let mortgage, if this suits your circ*mstances. So long as you meet the criteria of the new lender, you can generally choose the terms that suit your needs.
Can I remortgage a home I’ve bought through a government scheme?
Generally, yes you can, but it will depend on which scheme you used and your circ*mstances. Not all lenders offer remortgages to those applying through government home ownership schemes, and those that will are usually the same lenders that also offer mortgages to this type of applicant.
Shared ownership mortgages can usually be remortgaged based on the value of your share of ownership.
Right to Buy mortgages can also generally be remortgaged, but this can be more complex. Depending on when you bought the property, you may not be able to make any changes for a defined period or may have to pay off your equity loan in order to do so.
How often should I remortgage?
There are no set rules about how often, or even whether you should switch your mortgage deal at all. The best time to do it is typically when your current deal comes to an end, or when it otherwise makes financial sense to do so.
It’s also worth bearing in mind that if you keep leaving deals early and paying ERCs in order to get the best mortgage interest rate, the fees paid over the lifetime of the mortgage will likely outweigh the benefits you get from changing mortgage deals in the first place. Seeking advice is the best way to make sure switching your mortgage is in your best interest.
How do I switch mortgage providers?
You can either speak to your current or a new lender directly to ask to switch mortgages, or speak to a mortgage broker, if you want to be certain you're changing to the best deal available to you.
Once you've chosen a product, the relevant lender will provide an updated valuation of your property to ensure it still provides adequate security for the loan. Assuming they are happy that it does, they should then make you a new mortgage offer.It's a very similar process to when you took out your original mortgage, however, in this case, the conveyancer will arrange for the new loan to repay your existing mortgage.
