Considering remortgaging with your current lender or moving away from them?

By Mark Carney. August 30, 2024.

Keen to secure an improved mortgage deal when your current arrangement comes to an end?

Remortgaging is the process of switching your existing mortgage on a home you already own to a new deal. That could be with your current lender, but it doesn’t have to be.

If you want to remain with your existing lender, but change your mortgage product to a new one, then you should consider a product transfer (also referred to as a ‘product switch’).

Below, I answer the most frequently asked ones.

Is it a good idea to remortgage?

You can remortgage to a new deal or lender at any time – but you need to consider interest rates and any fees you’ll have to pay to switch.

There could be several reasons why you want to remortgage, including:

Your current fixed-rate arrangement is ending

This is the most common motivation. Once you’re fixed-rate deal ends, and if you don’t have a new one in place, you’ll be placed onto your lender’s standard variable rate (SVR). This can be more expensive, and your monthly repayments may increase as a result.

You want to borrow more

This is often referred to as a ‘further advance’. Remortgaging with a new lender for this reason might offer you a more suitable rate as opposed to sticking with your existing lender.

Consolidate your debts

Remortgaging can be a way to combine any other debts you have into a single one (your mortgage). In many cases, this makes managing your money a lot easier and, in effect, your mortgage becomes a single loan.

To pay for home improvements

By remortgaging your home, you can release built-up equity to help fund a renovation project providing, of course, you have sufficient equity to begin with and can afford the repayments.

Should I stay with the same mortgage lender?

Deciding whether to stay with your existing mortgage provider or switch to a different one depends on various factors.

On the one hand, it can be more convenient to stick with your mortgage lender because it may not require additional paperwork or hassle.

On the other, it can make more sense to switch to a different mortgage lender if they offer a better rate than your current lender, meaning your monthly repayments will be lower.

However, it’s important to carefully research and understand your options before making an informed decision.

Is it easier to remortgage with the same lender?

Remortgaging with the same lender is regarded as more straightforward than switching to a new one.

As your current lender is already familiar with your circumstances, it reduces the amount of bureaucracy required when it comes to remortgaging.

You can choose the timing; it doesn’t necessarily need to be when an existing deal is ending. For example, you might want to switch from an interest-only arrangement to a fixed-rate one if the terms are better.

Remember; if you repay your mortgage early, or make an overpayment that’s more than your overpayment allowance, an Early Repayment Charge (ERC) may be due.

The best thing to do is check the terms of your deal, or ask your mortgage advisor to seek clarification.

Disclaimer

Think carefully before securing any debts against your home.

Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.