Are you sitting on your lender’s standard variable rate (SVR)? Or is your fixed-, tracker- or discounted variable mortgage rate coming to an end? If so, switching your mortgage can be a great opportunity to save money and find a better deal.
This can present you with an important choice – is it better to just negotiate a new deal or to find a new lender altogether?
A mortgage is one of the biggest financial commitments that you’re likely to make, which is why it’s important to find the right deal for you. Read on to find out why you shouldn’t necessarily just take the deal your existing lender offers you.
Taking a deal with your current lender can be faster and more convenient
While it isn’t necessarily always the best decision for you, there can sometimes be benefits when staying with your current lender.
When you take a new deal with your existing lender, this is typically known as a “product transfer” and is not usually considered new lending, unless you wished to borrow an additional amount. Since the process is slightly different, there can be some advantages to this.
The most obvious ones are that it’s typically much more convenient to remain with your current lender. Since you have worked with them before, they should already have your financial information on file, meaning that the process can go much more quickly.
Of course, if you’re hoping to borrow more, then they may need to do further checks and so you may have to navigate the underwriting process.
However, just because it is more convenient to remain with your current lender doesn’t always mean that it’s the right decision. A mortgage is one of the biggest financial commitments that you are likely to make, which is why it’s important to ensure that you find the best deal for you.
A new lender could give you more favourable terms on your mortgage
One of the main drawbacks of remaining with your old lender is that you may be limited in the number of mortgage products you can choose from. When you choose to remortgage with another lender, you may be able to access a much wider range of options.
You may also find that you’re in a much better financial position than when you originally bought the house, which can mean that you get more favourable terms.
If your income has risen since you first took out the mortgage, and your loan-to-value ratio has gone down, then you’ll typically have access to a wider choice of lenders.
If you have a greater choice of lenders, you’re more likely to be able to find a more favourable deal. This may be one that offers a lower mortgage rate, meaning that you could potentially save thousands of pounds in the long term.
Working with a broker can get you access to a wider array of mortgage products
If you choose to remortgage your home and want to ensure that you’re getting the right deal for you, you may want to seek professional help.
When you work with a mortgage broker, you can often gain access to a much wider range of mortgage products, which can give you a higher chance of finding the most favourable deal for you.
According to research by mortgage sourcing platform Twenty7Tec, published in Mortgage Introducer, there are around 12,000 mortgages available through working with a professional. This is significantly higher than the number available directly on offer from lenders, which stands at around only 2,000.
Working with a broker can also help to make the process faster, easier, and as stress-free as possible. This can help you to rest easy knowing that you’ll be able to find the right mortgage product for you.
Get in touch
If you are considering remortgaging your home and want to ensure that you get the best deal for your needs and circumstances, get in touch. Email enquire@london-money.co.uk or call us at (0207) 808 4120 to find out more.
Please note:
Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.