Do you want to remortgage with the same lender? In this guide, we explain the pros, cons and potential limitations.
Remortgaging ensures you always have the best product available for your current circumstances.
If your mortgage deal is nearing its end, you should think about switching to a new and better deal.
Remortgaging involves changing the mortgage you currently have on your property, and it’s a significant financial decision that can save you thousands and even help you borrow more.
You can remortgage by moving to a new lender or entering a different deal with your existing lender.
It’s always a good idea to see if you can get a better elsewhere, but remortgaging with the same lender also has benefits.
This guide explores how to remortgage with the same lender, the benefits, and factors to consider when deciding.
Remortgaging With The Same Lender
Remortgaging with the same lender is super easy, and it’s usually referred to as product transfer.
It involves switching to a new mortgage deal with better interest rates where possible and a revised term if possible.
If the amount borrowed remains unchanged, product transfers don’t involve a total property valuation, dealing with solicitors, or eligibility assessments, making them very quick to complete.
Here’s how to remortgage with the same lender:
- When your deal gets close to ending, your lender will usually get in touch with you with various offers and rates for you to choose from, enticing you to stay with them.
- The next step is to choose the deal you want from the offers in front of you and transfer. It usually involves a few clicks online in most cases.
- The final step is to agree to the new terms, and voila, you’ve remortgaged. No fees or extra charges.
A mortgage broker or advisor can also help you remortgage with the same lender.
They’ll usually compare your lender’s offer with the whole market, so you can be sure you’re getting the best deal available.
Benefits of Remortgaging with the Same Lender
It Saves You Money In the Short-term
Remortgaging with the same lender saves you money upfront by helping you avoid valuation fees and legal costs.
However, this is only a short-term saving, and you should weigh it against remortgaging with a new lender whose willing to pick up the tab on such fees, and many do.
Such a route can save you money in the long run if you get a better rate with lower monthly repayments.
It’s Time Saving
Since you’re not purchasing a new property, your current lender already has your details from your original mortgage application.
It only involves a simple swap of mortgage products and can be processed in 30 minutes.
Switching to a new lender requires more preparation and time. It can take weeks, and you need to start planning four to six months before your current deal expires.
It Can Work In Your Favour
If there have been considerable changes in your life or situation since your last mortgage application, an existing relationship with the current lender will work in your favour.
A new and complete mortgage application can be stressful if your financial situation has changed. For example, you may have changed jobs and are earning less money.
If you stick with your current lender, such changes won’t matter, provided you make repayments on time. The process is more straightforward because they won’t ask for income proof or wage slips.
Factors To Consider When Deciding
Remortgaging with the same lender without checking what other remortgage deals are out there is not recommended. Here’s why:
It might not be the best deal
The lack of choice is the main drawback of remortgaging with the same lender.
There’s no guarantee the remortgage deal your current lender is offering is the best one on the market, and since you’re an existing customer, you’ll not access their new customer deals.
They’ll likely share the deal compared to their standard variable rate (SVR) to make it enticing, but a new lender can probably beat the rates.
It’s wise to shop around before agreeing to a product transfer and see how much you can save.
You can miss out on a better loan-to-value (LTV)
When you remortgage with a new lender, they’ll conduct a total property valuation of your home, which is rarely done in a product transfer.
Finding a new lender is the way to go if your property has increased in value since you first took up your mortgage.
The LTV is the size of your mortgage expressed as a percentage of your property’s value.
Lenders consider LTV bands when making their decision, and it will impact the deal you get. Lenders generally offer better rates to people with lower LTV.
If a new valuation shows your property’s value has increased, you’ll have access to a broader choice of deals and better rates.
Remortgaging with the same lender may not be as flexible
When you first entered your first mortgage deal, you were probably more focused on getting onto the property ladder.
After making repayments for a couple of years, you’re likely more focused on paying off the debt with more flexibility and remortgaging with a new lender can help you achieve this.
Whether you want a deal with lower monthly repayments or one that lets you make overpayments without being penalised, you’ll likely need to cast your net a little wider than what your current lender has to offer.
Shopping around for a new lender with such factors in mind can help you find the best deal for your current situation.
Does Remortgaging With The Same Lender Involve Credit Checks?
You generally don’t need a credit check to remortgage with the same lender.
If you’ve been making repayments on time, they know they can trust you and don’t have to dig into your creditworthiness.
The lack of a credit check can make sticking with your current mortgage lender more appealing if your credit score has recently taken a hit.
How To Remortgage With The Same Lender Final Thoughts
Remortgaging with the same lender can save you time and fees and work in your favour if circumstances have changed since taking out your mortgage.
However, it’s not recommended to remortgage with the same lender before shopping around and checking what other deals are available.
Consider using a mortgage broker with complete market access to ensure you get the best deal.
Call us today on 01925 906 210 or contact us. One of our advisors can talk through all of your options with you.