If your current mortgage deal is coming to an end, now is the time to remortgage and consider a switch to a new deal. This way, you won’t fall onto your current lender’s (SVR) which is likely to be higher than the interest rate on your current deal.
Can you remortgage with the same lender?
Yes, you can remortgage with the same lender. Doing so means that you won’t need to search the mortgage market for a new lender and you can simply roll onto your new remortgage deal once your current mortgage term is up.
However, sometimes it is advisable to consider an alternative lender and compare the whole current mortgage market. Keep reading to learn more and then get in touch with our expert mortgage team if you are ready to switch to a different mortgage.
Should I remortgage with the same lender?
Why remortgage when switching mortgage lenders can be a hassle as it means rounding up all the paperwork that is needed for the loan application with the new lender. Therefore, sticking with the same lender might appear to be the better option. But the question of whether you should consider changing mortgage lenders or not depends on the mortgage rates they can offer you and your personal circumstances.
How long does it take to remortgage with the same lender?
If you decide to stick with the same mortgage lender, your remortgage won’t be classed as ‘new lending,’ unless you remortgage to add to your existing borrowing. Instead, the remortgage will be classed as a ‘mortgage product transfer,’ wherein one mortgage product is transferred to another.
The processes involved with a product transfer don’t take as long as there is far less paperwork involved. In most cases, the product transfer can be completed within a matter of days.
This is one of the reasons why you might decide to remortgage with your current lender and there are other advantages to doing so. Of course, it’s important to weigh up the cons as well as the pros, so consider the following.
In August 2022 our mortgage advisors looked at what percentage of our clients after research to find the best deal were recommended to stay with their existing mortgage lender. The results were that 19% of our clients were advised that their existing mortgage lender offered them the best rate.
The good news is we can take care of your remortgage whether it is with your existing lender or if the best advice is to move to a new mortgage lender. – Stepehen Roberts
The pros of remortgaging with the existing lender
Below are 3 advantages of remortgaing with your existing lender:
1) A simpler application process
Your current lender will already have your details to hand so they won’t require a lot of paperwork from you when you apply for a new deal.
2) Fewer fees
If you stay with the same lender, you shouldn’t need to worry about legal fees, arrangement fees, and the costs related to a new property valuation. You won’t have to worry about early repayment charges either, provided you don’t leave your existing mortgage before the initial period ends.
3) A reduced chance of rejection
If your financial situation has changed and you are earning less money, there is a chance that your application will be rejected if you move to a new lender. Alternatively, you might be offered a more expensive mortgage deal. But as your current lender won’t ask for wage slips or other documentation, you should be able to remortgage with the same lender, provided you aren’t in arrears on your existing mortgage.
The cons of remortgaging with the same lender
Below are 3 disadvantages of remortgaing with your existing lender:
1) You might not get the best deal
There is the chance that you might get a decent mortgage offer from your current lender but as there are loads of mortgage deals on the market, it might also be that a better deal is waiting for you elsewhere. As such, it pays to shop around as you could save money by switching lenders if you qualify for a cheaper fixed rate.
2) You might miss out on a better loan to value (LTV)
The loan to value is the size of your mortgage as a percentage of your property’s value. The higher the loan to value LTV, the higher the interest fee will be on your mortgage.
As your current lender probably won’t carry out another property valuation on your home, they won’t know whether it has gone up in value since you took out your original mortgage product. As such, you won’t benefit from a lower LTV interest rate if your property has gone up in value.
A more thorough valuation will show that your house is potentially worth more so this is one reason why you might want to consider another lender.
3) Your lender might not give you the best advice
We aren’t suggesting your current mortgage provider will lie to you but to retain your custom, they might try to dazzle you with mortgage deals that aren’t as attractive as those being offered elsewhere. They are unlikely to sit down and compare their deals to those that are being offered by other lenders with you, so you won’t get a wider overview of what may be available.
It’s for this reason that you should get independent advice from a mortgage broker. As a mortgage broker is not a lender, their only bias is to those deals that are genuinely better for your financial circumstances.
How about remortgaging with new mortgage lenders?
Your existing relationship with your current mortgage lender might be a good one but you don’t need to stick with them for the long term! You are in your right to switch to a different lender once your current deal expires, especially if your monthly repayments are going to be lower on a new mortgage deal.
Lenders make switching to them easy these days with incentives like free legal fees, free valuation survey and some will even pay any exit fee!
Again, there are pros and cons to consider.
The advantages of remortgaging with a new lender
Below are 3 advantages of switching to a new lender when you remortgage:
1) You have access to a lot more deals
The best mortgage deal on the market might not lie with your current lender. As there are more than 14,000 deals out there, you could be financially better off if you make the switch and to a different lender not stay with the same lender. You don’t need to compare these deals alone as we can do this on your behalf.
2) You may be offered a perk or two
Lenders want your business which is why they often offer new customers a perk. They might offer you free legal fees, for example, payment holidays, or cashback on your mortgage. Your current lender is unlikely to offer you these incentives so switching to a new mortgage is sometimes the sensible thing to do, especially if you can be guaranteed lower interest rates when doing so.
3) More flexible mortgage options
If you do have a better loan-to-value ratio then you will be offered a wider range of mortgage options. These are worth considering, despite the valuation fees that you may be liable for, as you could save money on your mortgage payments in the long term because of the lower interest rate on your loan.
The disadvantages of remortgaging with a new lender
Below are 2 advantages of switching to a new lender when you remortgage:
1) There are fees attached
As was the case when you took out your existing mortgage product, you will be subjected to various fees. As you will require a solicitor for the legal paperwork needed, these will include legal fees, unless you can find a mortgage lender that waives these as part of their new customer incentives.
As well as solicitor fees, there are also charges attached to a full property valuation, and you may also need to pay an exit fee (also known as an early repayment charge) if you switch lenders before your existing fixed-term mortgage ends.
Your finances will be affected when you do pay fees but it’s important to consider the long term. If a new lender means reduced monthly repayments, you have less reason to resent the valuation fees, early repayment charges, etc. as you will be financially better off in the future.
2) It can be time-consuming
As we suggested, when you remortgage with the same mortgage lender, the process is faster. This is because they won’t need as much paperwork for your mortgage application, they won’t conduct a credit check, and there will be fewer legal requirements.
The process is longer with a new mortgage provider, as you will have to submit a new mortgage application and that will require more paperwork for the lender’s affordability checks. But again, if you can get the best deal on a mortgage, good things come to those who wait!
Case study: Helens Remortgage Decision
Why use a fee-free mortgage broker to remortgage
Should you remortgage with your current lender or should you remortgage with a new lender?
With so many deals and interest rates out there, it can be hard to know which lender is right for you. In some cases, your current lender might have access to the best mortgage rates and deals on the market but then again there could be other lenders that can offer you something that is far more affordable.
The answer? Speak to a mortgage broker!
Regardless of your reason for remortgaging, be it for a better deal, debt consolidation, or to raise money for home improvements and other lifestyle changes, get in touch with a mortgage advisor at YesCanDo Money.
We will consider the deals offered by your current lender and will compare them to those that are being offered elsewhere.
If your appointed mortgage advisor thinks you will be better off by staying with the same lender, they will let you know. But if they can put more money in your pocket by finding you a better deal from a new lender from the range of other mortgage providers that are out there, they will recommend this to you and give you all the help you need with the mortgage application.
To learn more, book an appointment with a mortgage advisor at YesCanDo Money today.
Remortgage with the same lender: FAQ’s
As the remortgage process is a simple one when you stick with the same lender, you may not need a solicitor for the product transfer.
However, if you are adding or removing someone from the mortgage, you are more likely to need somebody well-versed in property law, such as a solicitor or a conveyancer.
A switch transfer is when you set up a new mortgage with a different lender who then pays off the full balance of the old mortgage. At this point, you are no longer obligated to your previous lender as you hold a mortgage with your new provider.
You don’t have to wait until your mortgage is due for renewal although you will have to pay the early repayment charges set by your current mortgage provider if you decide to switch to a new deal early.
As such, it is sometimes better to wait until your mortgage term is almost up before you switch mortgages. Generally speaking, you should start looking around for a new mortgage about 3 months before your existing deal is due to expire.
However, if the savings you make on a new deal outweigh the costs of transferring, then it might be worth switching early. For more advice on this, speak to a mortgage broker such as ourselves and we will let you know the best course of action.
While the simpler option is to stay with your existing lender, it might not be profitable for you to do so. Therefore, it is still worth switching to a new lender, even though you will have to go through the application process again and have a new credit check carried out on you by the new mortgage provider.
Despite this hassle, making the switch is easier than you think, especially if you use a mortgage broker, as they will find you a new deal, liaise with your lender, and help you with every aspect of the mortgage application.