Should I Remortgage with same lender?

When it comes to remortgaging your home, there are two major ways in which you can go about it.

You can either stay with the same lender and replace your existing mortgage deal with a new one which is called a product transfer.  Or you can find a new lender and get yourself a new mortgage deal called remortgaging.

Based on your circumstances, it is important to choose the most feasible option.

Remortgage with same lender or new one but always work with a reliable and capable remortgage broker to guide you in making the right decision.

 Is It a Good Idea To Remortgage With The Same Lender?

When your fixed term mortgage comes to end your lender will then start to write to you about it and offer the new mortgage options. If you choose another mortgage rate from the same lender with the help of mortgage broker or going directly to your lender, the process is very simple and quick and called product switch or a product transfer.

What Are The Advantages of Remortgaging with The Same Lender?

Remortgage with same lender comes with many advantages. Some of them are mention below.

Saving on Monthly Payments

At least initially, remortgaging with the same lender helps you save a good amount of money. Your current lender allows you to secure a new rate for up to 6 months in advance without incurring early repayment charges. If the rates drop after securing most lenders always allow a change before the new rate comes into effect.

If your current fixed term has ended your monthly payments will go up because your mortgage will now be on standard variable rate (SVR). Remortgaging to a new lender could take longer, up to 8 weeks. Sometimes remortgaging to a new lender is not the option you want to go for. In this case, the product transfer to the same lender will help save on your monthly mortgage payments as it is a lot quicker.

Saving on Fees

When you are remortgaging with the same lender, you may not need to pay an extra valuation fee as your lender uses your house price index to check the valuation of your property. Unless you want to challenge the valuation, you save on valuation fees.

Remortgaging with your same lender does not need any legal work as no changes to any legal title are made. That means saving on your  conveyancer fees if you remortgage with the same lender.

Further, you can save money by not paying an exit fee/redemption fee to the lender as you are not switching lenders.
Your lender also may not charge you with early repayment charges if you secure the rate in advance. The new rate will start at the end of your fixed term which allows you to secure a better rate sooner without any early repayment charges.

Simple and Quick Process

The process of remortgaging with the same lender is a lot simpler and quicker as the lender already has all your details about borrowing and property info. While changing the rate, no legal changes are made which saves a lot more time compared to making a new mortgage application to a new lender.

Doing a product transfer with your existing lender is a simple procedure of switching mortgage products, unless you are not making any material changes like borrowing more money, reducing the term or increasing the mortgage term. This needs additional underwriting resulting in a longer time to complete.

While a new mortgage with a new lender may take a few weeks/months to complete, remortgaging with the existing lender would not take more than a few days. This helps you save the time and effort you would normally put into getting a successful mortgage.

No Strict Credit Checks or Paperwork

When it comes to remortgaging with the same lender, they won’t run a full credit search on you. Unless you have not missed your mortgage payments, the existing lender will ignore the credit check while remortgaging with them.

Apart from credit checks, your existing lender will also not need income proof and bank statements if you are not making any changes to the mortgage like additional borrowing or making change in mortgage term.

Disadvantages of Remortgaging with the Same Lender

While remortgaging  with your existing lender has its own advantages, here are some important considerations to keep in mind before you make your final decision of remortgaging with same lender or going to a new lender.

Limited Deals

When you remortgage with the same lender, it may limit your options of getting a new mortgage deal. Your current lender can offer you only so many mortgage deals which may or may not be ideal for you.

When you are not looking to remortgage with a new lender, you may be missing out on cheaper rates.
Your mortgage broker could help you look for the best deals in the market that help you save money on your mortgage payments.

Missing Out on Introductory Rates.

New lenders may provide you with introductory rates for attracting new clients.
While remortgaging with the same lender you may miss out on these mortgage rates.

Many lenders provide exclusive offers to new borrowers that include free valuation, cashback, no legal fees, and more. Therefore it is always important to work with an independent mortgage broker who would search the whole of market and prevent you from missing good mortgage rates most suitable to you.

Missing Out on Better LTV

In most cases, the existing lender does not conduct a thorough valuation of the concerned property when it comes to a product transfer as they rely on house price index (HPI) valuation data.

This may prevent you from getting the true value of your property. If the value of your property has increased significantly over time with home improvements,  remortgaging with a new lender would help you get a cheaper deal with the correct LTV (loan-to-value).

What is Product Transfer?

A product transfer means you’ll switch to a new mortgage rate offered by your existing mortgage lender, instead of going through the process of applying for a new mortgage deal with a different lender known as remortgage.

How Does Remortgaging With The Same Lender Work?

Remortgage with same lender know as rate switch or product transfer. To get started find what do you need to remortgage with same lender first.  When your current mortgage deal ends,you will usually be able to lock in a new mortgage rate up to 3 months in advance of your current deal ending.

Your lender will get in touch: Your mortgage lender will contact you with your rate change options. Some lenders even highlight details of the mortgage rates available to you as an existing customer.

Compare remortgages from across the market: Compare mortgage deals from your current lender and from whole of market with help of fee free mortgage broker.

You may find better interest rates or more suitable terms elsewhere than offered by your current lender.

Apply to the right lender for you. Once you are sure what rate is better option for your remortgage needs then check your eligibility criteria. You can either go ahead with the product transfer with same lender or apply for a remortgage with a new lender.

Important Factor to Consider when Doing a Remortgage With Same Lender.

• Lock in your rate: You can usually secure a product transfer or rate switch deal three to four months before your existing mortgage ends. This gives you peace of mind when you have a secure a new mortgage rate but, if you spot a better rate after securing the new rate, you may be able to switch mortgage rate again right up until a few weeks before completion.
• Don’t assume your current lender is better option: It’s important to compare your options across market to find a better rate. Some lenders may offer more competitive rates; product fees or terms better suited to your current requirements. This can include things like flexible overpayment option or the port your mortgage to new property.
• Consider change of circumstances: If your income has changed or your credit history has worsened since you got your original mortgage. You may, therefore, be better sticking with your current lender as remortgage to new lender may be not possible or difficult.
• Know the fees. You may not need to pay valuation or legal fees but you may still need to pay product fees also known as arrangement fees. Always look at the total cost of mortgage over the term, including fees and interest rate.

Some FAQs with Remortgaging With The Same Lender or a New One.

How do I Remortgage with The Same Lender?

At the end of your fixed term, your lender will contact you about your current mortgage rate coming to end and explaining the options you may have. At the present high interest rate market, most lenders will allow you to secure the new rate 6 months in advance. Always speak to a fee free mortgage broker to start the process of remortgaging your home early, while saving on broker fees the whole time.

What Could Stop me form Remortgaging with the Same Lender?

Your income and credit scoring could stop you from doing a remortgage with your same lender if you would like to make changes to your mortgage, as it involves full underwriting. But in most cases when it’s a like to like product transfer with the same lender, lenders don’t do a credit search unless you have missed mortgage payments which could stop you from securing a new rate.

Do I Need A Solicitor to Remortgage with the Same Lender?

Homeowners are often able to remortgage with the same lenders without solicitors. Unless there is a material change while remortgaging, which then depends on the lender’s requirement. In most cases if you are just changing the rate as a like-to-like remortgage you do not need a solicitor. But changes like raising more funds or taking someone’s name off the mortgage or adding someone on  are called a transfer of equity and may need legal work which requires a solicitor.

How Long Does It Take to Remortgage with the Same Lender?

Completing  a remortgage with the same lender can be done very quickly. Usually just change to a new rate could take a week as it can be done online or over the phone. Some lenders need an acceptance form the client which could delay it a bit. A remortgage to a new lender takes longer as it will need valuation, underwriting and legal work. A remortgage with the same lender does not involve the underwriting and legal work.

What are The Charges When I Remortgage with the Same Lender?

Remortgaging to the same lender does not require valuation unless the client is not happy with index price. In that case, the client will pay valuation fees for a new valuation. Legal work is not required in a like-to-like remortgage. Arrangement fees are payable to lender, if any. Most lenders do wave off exit fees payable on a remortgage with the same lender.

Can I do Additional Borrowing When Remortgaged to the Same Lender?

Yes, your lender will allow you to raise more money against your property if they fit in the criteria set by lenders. Many common reasons for raising funds are home improvement, paying off debt or deposits to purchase new property.

Should I Use a Mortgage Broker when I Remortgage with the Same Lender?

While a remortgage with the same lender is a very easy process, it is always a good idea to seek help from a mortgage broker. Your mortgage advisor can scan the whole market with their years of expertise and compare the mortgage deals you may be eligible for. Some mortgage brokers even offer fee free mortgage advice, like MariannaFS while you remortgage with the same lender.

These are some of the most important factors which need to be considered while thinking of remortgaging with the same lender or to a new one.

Before you make your remortgaging application, make sure you evaluate every possibility and have knowledge about different deals available in the market.

Compare Best Remortgage Rates

Get in touch with MariannaFS to see how they can help with your remortgage.