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Why Choose Ascot Mortgages
Are you considering switching mortgages? Changing your mortgage lender or switching to a new deal can provide you with several benefits, such as lower interest rates, reduced monthly payments, or access to additional funds. In this article, we’ll explore the reasons why you might want to change mortgage providers, the advantages of doing so, and when it might not be the right choice for you.
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Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
04.10.2023
Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
04.10.2023
Why should I switch mortgage provider?
There are several scenarios in which changing mortgage lenders or providers can be advantageous for homeowners in the UK.
Your fixed-term deal is about to end
If your fixed-term mortgage deal is coming to an end, it’s an ideal time to explore other options. When your current deal expires, you’ll usually be transferred to your lender’s Standard Variable Rate (SVR), which tends to be higher than fixed rates. By switching to a new mortgage deal before the fixed term ends, you can secure a better rate and potentially save a significant amount of money over the long term.
You want to overpay on your mortgage
If you have the means to overpay on your mortgage, switching to a new provider or changing your mortgage lender can offer you more flexibility. Some lenders allow you to overpay a certain percentage of your mortgage balance each year without incurring penalties. By changing mortgage providers that permit higher overpayment limits or has lower fees for overpayments, you can pay off your mortgage faster and potentially save on interest charges.
You're eligible for a more competitive mortgage tier
Over time, as your property increases in value and you pay off your mortgage, you may become eligible for a more competitive mortgage tier. Switching to a new provider can help you take advantage of lower interest rates and better terms, ultimately reducing your monthly payments and saving you money in the long run.
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What are the benefits of switching mortgage provider?
When you change mortgage providers or lenders, you can enjoy various advantages that can positively impact your financial situation.
You can find a better deal
By exploring different lenders and mortgage products, you have the opportunity to find a better deal that suits your needs. Comparing mortgage rates, terms, and fees from multiple providers allows you to identify the most competitive offer available, potentially saving you thousands of pounds over the course of your mortgage.
Get a more up-to-date property valuation
Switching mortgage providers often involves obtaining a new property valuation. If the value of your home has increased since you took out your original mortgage, you may be able to access better loan-to-value rates, allowing you to borrow a higher percentage of your property’s value. This can result in more favorable mortgage terms and lower interest rates.
Get access to a sum of money
If you’re looking to release equity from your property, switching mortgage providers can provide you with an opportunity to access a lump sum of money. This can be useful for home improvements, debt consolidation, or other financial needs. By switching to a new mortgage deal, you may be able to secure a larger loan amount or better borrowing terms to meet your requirements.
When shouldn't I switch mortgage provider?
While switching mortgage providers can be advantageous in many cases, there are situations where it may not be the right choice for you.
The early repayment fee is high
Some mortgage deals come with early repayment charges, which can be substantial. If your current mortgage has a high early repayment fee, it’s crucial to consider whether the potential savings from switching outweigh the costs. It’s advisable to consult with a mortgage advisor to assess the financial implications and determine if switching is the right decision for you.
Your mortgage debt is small
If you have a small mortgage debt remaining, the potential savings from switching may not justify the associated costs and fees. In such cases, it may be more beneficial to continue with your current mortgage until it’s fully repaid.
Your home's value has dropped
If your property’s value has decreased since you obtained your mortgage, switching to a new provider may result in higher loan-to-value ratios, higher interest rates, or even a lack of available options. It’s important to consider the impact on your finances before making a decision.
Your circumstances have changed
If your circumstances have changed significantly since you first obtained your mortgage, such as a change in employment or a reduction in income, it’s essential to evaluate your eligibility for a new mortgage deal. Lenders assess affordability based on various factors, including income, credit history, and financial stability.
You've had recent credit issues
If you’ve experienced credit issues since you obtained your current mortgage, such as missed payments or defaults, it may be more challenging to change mortgage providers. Lenders typically consider your credit history when assessing your application, and recent credit issues may limit your options or result in less favorable terms.
Alison Gibson
Ascot Mortgage Expert
Remortgage
Remortgaging is applied when you keep
living in your present property while applying for another mortgage deal with a new lender. Before finding out how to remortgage and get the best offers from experts like Ascot Mortgages, you have to check meeting what parameters of the deal that can help you succeed the most. The range of background factors varies a lot — from the recently changed loan-to-value ratio or your existing agreement coming to an end.
Whether you are trying to get a more beneficial deal or searching for funding to improve your home conditions, remortgaging is one of the most advantageous scenarios to consider.
Am I eligible for a new mortgage deal?
Eligibility for a new mortgage deal depends on various factors, including your income, credit history, property value, and affordability. It’s advisable to consult with a mortgage broker who can assess your individual circumstances and guide you through the process. They will help you understand your options, compare deals, and find a mortgage provider that suits your needs.
How do I switch mortgage provider?
Switching mortgage providers typically involves the following steps:
Get in touch with a mortgage broker
Engaging a mortgage broker can simplify the process of switching mortgage providers. They have access to a wide range of lenders and can help you compare deals, understand the associated costs, and identify the most suitable mortgage option for you
Make your application
Once you’ve chosen a new mortgage provider, you’ll need to complete an application form. You’ll typically be required to provide documentation related to your income, employment, identification, and property details. The new lender will assess your application and conduct a valuation of the property.
Sign the offer
If your application is approved, the new lender will issue a mortgage offer outlining the terms and conditions of the new mortgage deal. It’s essential to review this offer carefully, ensuring that you understand the repayment terms, interest rates, and any associated fees.
Check your new mortgage's start date
Before finalising the switch, confirm the start date of your new mortgage with the new lender. This will ensure a seamless transition and avoid any potential overlap or gaps in mortgage payments.
At Ascot Mortgages, we understand that switching mortgage providers is a significant financial decision. Our experienced mortgage advisors are here to help you navigate the process, compare deals, and find the best option for your individual needs. Contact us today to discuss your mortgage requirements and explore the potential benefits of switching mortgage providers.
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FAQ
When remortgaging, you may encounter several types of fees. These could include arrangement fees for the new mortgage, which can range from a few hundred to a couple of thousand pounds depending on the lender and deal. You might also face valuation fees for the new lender to assess the value of your property. If you’re leaving your current lender before your current deal ends, there may be early repayment charges, which can be a percentage of the loan. Solicitor’s fees for handling the legal side of things should also be considered. It’s important to factor all these costs into your decision to remortgage.
The process of switching mortgage lenders can typically take between 4 to 8 weeks, but it may be longer depending on individual circumstances. This includes the time for an application review, property valuation, legal work, and finally, the completion. To avoid any gaps and to ensure the switch takes effect smoothly, it’s advisable to begin this process around 3 months in advance of the current product ending. This timing allows for a balance, initiating the process within a good time frame, but not too soon, to ensure everything aligns with the desired schedule.
Technically, you can switch mortgages as often as you like, as long as you’re able to meet the criteria set by lenders. However, most people tend to switch at the end of their mortgage deal, which is usually every 2 to 5 years. Switching more frequently could incur early repayment charges and additional fees, so it’s important to consider these factors before deciding to switch.
While switching mortgages can often save you money, there can also be disadvantages. These might include potential early repayment charges if you’re leaving your current deal before the term is up, fees associated with the new mortgage, and even the possibility of more stringent affordability checks. Moreover, if you have less equity in your home or your financial circumstances have changed, you might not get a better rate. Lastly, the process of switching can take time and effort. Therefore, it’s crucial to weigh the potential benefits against these drawbacks before making a decision.
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Legal
Ascot Mortgages authorised and regulated by the Financial Conduct Authority and can be found on the FCA register (www.fca.org.uk) under reference 776062. The FCA do not regulate some forms of mortgages. The guidance and advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate it will be £399 per mortgage account. Ascot Mortgages Ltd give you the option to pay a non-refundable fee of £879 payable with the application. If this option is taken, Ascot Mortgages Ltd will refund any procuration fee received by the lender.
Ascot Mortgages Limited is registered in England and Wales and have their registered office at 8 Webster Court, Westbrook, Warrington, WA5 8WD. The company’s registration number is 06764971.
We are a credit broker, not a lender. We work with the whole of the lending market. We may receive commissions that will vary depending on the lender, product, or other permissible factors. The nature any commissions model will be confirmed to you before you proceed.
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