Guide to switching mortgage provider

When you switch from one mortgage deal to another, it’s known as remortgaging. You can remortgage your property with the same provider or a different one – you’re not moving home and your new mortgage will still be secured against your existing property. Read our guide on what you need to know if you switch mortgage provider… 

Tobi Owens From the Mortgages team
3
minute read
posted

You want to find a more competitive deal

If your current deal isn’t competitive, you might want to find a better interest rate. Or perhaps you want to overpay to clear your mortgage quicker and your current lender won’t let you do this without paying a hefty penalty.

Split 1

Your fixed term deal has come to an end

Your current deal could be coming to an end – most fixed rate mortgages last between two to five years. At the end of the fixed-rate period your interest rate typically reverts to the lender’s standard variable rate (SVR). Variable rates tend to be higher than fixed rates, which is why it’s a good idea to move to a new deal when your fixed rate mortgage comes to an end.

Get access to a sum of money

You may want to remortgage to get access to a sum of money. You do this by releasing equity (the share of your home that you own outright).

Your equity includes your initial deposit, the amount of your mortgage that you’ve already paid off and any increase in the value of the property. If the property has fallen in value, your equity will be reduced. If the value falls below the amount of your mortgage, you’re in what’s known as ‘negative equity’, so remortgaging to release funds is not an option.

Am I eligible for a new mortgage deal?

When you remortgage your property, the mortgage provider will carry out an assessment of your financial circumstances, which will include an affordability and credit check.

It may be harder to get a deal if your financial circumstances have changed: for example, your employment status is different, you’re on a lower income or there’s been a significant increase in your monthly outgoings.

You can use our mortgage eligibility checker to see how likely it is that you’ll qualify for a mortgage before you apply, without impacting your credit score.

Split 2

What are the fees when remortgaging?

When you remortgage your home, you might be charged an exit fee on your existing deal if it hasn’t come to the end of its term. Plus, you’ll typically have to pay arrangement fees on a new mortgage, as well as solicitor’s fees. You should take these into account when deciding whether remortgaging makes sense.

What are the benefits of sticking with the same mortgage provider?

You don’t have to change provider if you want to remortgage, you can simply switch deals with your current provider. This could mean you have less paperwork to complete, as your lender already has your information, and you may have to pay out less in fees.

Compare mortgages

Mortgages are complex financial products, so it’s important to take your time to find the right deal.

You can do this by starting a mortgage comparison.

Looking for a mortgage?

Compare mortgages in minutes to see if you can save

Compare now