Can you change your mortgage provider?
In a word, yes. Switching your mortgage provider is something you should consider doing at some point, as it can save you thousands of pounds in interest payments.
The process is called remortgaging, and the first thing you need to do is to look at the deal you have now, and see if you can find a better one with another lender.
Is it worth switching mortgage providers?
Many mortgage providers have ‘introductory’ rates that are designed to attract new customers. But when the honeymoon period is over, your mortgage may be switched to a higher rate.
Before the introductory rates period ends is the time to start looking around and save some substantial money.
For instance – if you have a £100,000 mortgage, at 3.5% interest, over 25 years, you’ll pay £150,138* over the loan period.
But if you are able to get a mortgage at 3%, just half a percent lower, you’ll pay £142,239* over the life of the loan – a saving of £7,899*.
And because your repayments will be reduced from £501* per month, to £474*, this also gives you the option of paying your loan off earlier, by maintaining the original monthly repayment.
Is it difficult to switch mortgage providers?
The easiest way is to find out what your current lender is offering. If they have lower rates, you can ask to be switched to that rate, but if there is a better deal available elsewhere, switching to it isn’t particularly difficult or time-consuming, provided you’re eligible.
Remortgaging is usually much easier than getting a mortgage in the first place. Just find an attractive mortgage deal, put in your application and your solicitor and the mortgage provider will take care of everything else.
How much does it cost to switch mortgage providers?
There will be some costs and fees to take into consideration when remortgaging your home.
The various fees and charges might include arrangement fees, booking fees, legal fees and sometimes, valuation fees. If you’re still in the introductory rates period of a fixed-rate mortgage, they might also be early repayment charges to cover.
How long does it take to remortgage?
It can be a relatively quick process when compared with getting your initial mortgage, usually four to six weeks on average.
This is providing your financial circumstances haven’t deteriorated, and you have a standard construction home.
Can you remortgage if you have a fixed rate?
It is possible to remortgage if you have a fixed rate, but please be aware that with most lenders, you’ll incur an early repayment charge. Every mortgage provider is different, but it could be set at between 1 and 5% of the loan.
*These figures are for demonstrative purposes only. Please contact your mortgage provider for information pertaining to your specific circumstances.