If your current mortgage deal is coming to an end, you might be wondering whether to stay with your existing lender or shop around
for a better deal. With interest rates fluctuating and lenders competing for business, re-mortgaging can be an opportunity to secure a lower
rate, reduce monthly payments, or release equity. But is it always the right move? Here’s what you need to consider before making a decision.
What happens when your mortgage deal ends?
Most fixed-rate or discount mortgage deals last between two to five years. When they expire, you’ll typically be moved onto your
lender’s standard variable rate (SVR), which is often higher than your previous rate. This can result in increased monthly repayments. To
avoid this, you have two main options:
- Negotiate a new deal with your current lender (a product transfer).
- Switch to a new lender (re-mortgaging).
Should you stay with your current lender?
Staying with your existing lender can be the most straightforward option, especially if they offer you a competitive deal. Here are some
advantages:
- Easier Process – A product transfer doesn’t require a full mortgage application, saving you paperwork and time.
- No Valuation or Legal Fees – Since you’re not changing lenders, you might avoid additional costs.
- Good for Those with Complex Finances – If your income situation has changed or your credit score has dropped, staying with your lender may be the easiest way to secure a deal. However, loyalty doesn’t always pay. Your lender might not offer the best rates available, meaning you could save money by switching to a new provider.
When to consider switching
Re-mortgaging with a new lender can be financially beneficial if:
- You Can Get a Lower Interest Rate – Even a small reduction in your rate can lead to significant savings over the mortgage term.
- You Want to Access Better Mortgage Features – Some lenders offer flexible repayment options, cashback deals, or fee free products.
- You Need to Borrow More – If you’re looking to release equity for home improvements or debt consolidation.
- Your Property Value Has Increased – If your home has risen in value, your loan-to-value (LTV) ratio may be lower, helping you qualify for better rates.
Costs to consider when re-mortgaging
While re-mortgaging can save you money, there are costs involved that you should factor in:
- Early Repayment Charges (ERCs) – If you re-mortgage before your current deal ends, you may have to pay an ERC.
- Exit Fees – Some lenders charge a fee to close your mortgage account.
- Valuation & Legal Fees – A new mortgage requires a property valuation and legal work, though some lenders offer fee free deals.
- Arrangement Fees – A new mortgage deal might come with an arrangement fee, which can add to the cost.
How to get the best re-mortgage deal
- Start Early – Begin researching re-mortgage options at least six months before your current deal ends.
- Check Your Credit Score – A better credit score can help you qualify for the best rates.
- Compare Lenders – Don’t just accept your current lender’s offer; use a mortgage broker or comparison tool to explore better deals.
- Consider Your Future Plans – If you’re planning to move in a few years, a flexible mortgage with no exit fees might be a better option.
When your mortgage deal ends, deciding whether to stay or switch depends on your personal circumstances, financial goals, and
the deals available. While staying with your current lender may be more convenient, shopping around could lead to substantial savings.
A mortgage adviser can help you compare options, calculate potential savings, and navigate the process smoothly. Get in touch today to find out if re-mortgaging could work for you.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTSON YOUR MORTGAGE.
