Should You Remortgage With The Same Lender?
Remortgaging with the same lender may seem like the easiest option when it comes to changing your mortgage, but is it always the best choice?
One of the most common questions is whether they should stick with their current lender or look for a new one. While there are pros and cons to both options, In this blog, we'll explore the potential benefits and drawbacks of remortgaging with the same lender, as well as other options available to you.
What is remortgaging?
Remortgaging is the process of switching your current mortgage to a new lender or negotiating a new deal with your current lender. The main reasons for remortgaging are to save money on your mortgage payments, release equity from your property, or change the terms of your mortgage agreement. Read our article here to learn more on how remortgaging works.
Benefits of Remortgaging with your existing lender
When it comes to deciding whether to remortgage with your current lender or switch to a new mortgage broker, there are several factors to evaluate.
- Interest rates
One of the most significant benefits of remortgaging with your current mortgage lender is the potential for better interest rates. Since you already have an established relationship with your lender, they may offer you a more competitive rate than a new lender would.
Furthermore, if you have a good track record of making timely mortgage payments, your lender may be more willing to negotiate and offer you a more favorable interest rate. They may also consider other factors, such as your credit score and overall financial health, when determining your interest rate.
Additionally, if you have a fixed-rate mortgage with your current lender, they may offer you the option to switch to a new fixed-rate term, which can help you secure a consistent and predictable mortgage payment for the next few years. This can be especially beneficial if you're looking to budget and plan your finances more effectively.
Another benefit of remortgaging with your existing lender is that you may be able to negotiate or waive certain fees. For example, if you have a good payment history and a strong credit score, you may be able to negotiate with your current lender to waive or reduce certain fees, such as arrangement or valuation fees. By sticking with your existing mortgage lender, you could save a lot more money and make the process of remortgaging more affordable, avoiding unnecessary expenses like legal fees.
Switching mortgage lenders can also come with other charges such as exit fees, early repayment fees, and mortgage broker fees. Exit fees are charges that your current lender may impose for leaving your mortgage early, and early repayment fees may be charged by your new lender if you pay off your mortgage before the end of the agreed term.
Mortgage broker fees may also be incurred if you choose to use a mortgage broker to help you find a new mortgage.
- Simplified Application Process
Additionally, when you remortgage with your current lender, you may also be able to avoid a credit check or a full affordability assessment, as your lender already has access to your payment history and financial information.
This can be particularly beneficial if your financial circumstances has changed since you first took out your mortgage, and you may not meet the same affordability criteria as you did before.
By staying with your current lender, you can explore these options and take advantage of any additional borrowing opportunities that may be available to you in the future.
On the other hand, a new mortgage provider may require another full property valuation and more legal paperwork which means you would need a solicitor to complete all the legal paperwork needed.
- Your Experience
Remortgaging with your existing lender can also provide you with a sense of continuity and stability. If you already have an established positive relationship with your lender, you know what to expect in terms of their customer service and support.
Staying with your current lender, you can maintain this continuity and avoid the uncertainty and potential stress of working with a different lender.
Drawbacks involved in remortgaging with the same lender
While there may be benefits to remortgaging with the same lender, there are also potential drawbacks that homeowners should consider before making a decision. Some of the most significant drawbacks include:
Missed opportunities for lower interest rates
Although your current lender may offer you a good deal on your new mortgage, there's no guarantee that they will offer you the best interest rate available.
By limiting your options to your current lender, you may miss out on better deals and potentially lower interest rates that are available elsewhere. We recommend to do your research and compare rates across multiple lenders to ensure that you're getting the best possible deal.
Limited choice of mortgage products
Your current lender may have a limited selection of mortgage products available, which may not meet your specific needs or financial goals. If you're looking for a particular type of mortgage product, such as a flexible mortgage or an interest-only mortgage, you may need to look beyond your current lender to browse mortgage deals and find the right product for you.
Overall, the decision to remortgage with the same lender or switch to a new one depends on your individual circumstances and goals. If you've had a positive experience with your current mortgage provider and they're offering competitive rates and terms, remortgaging with the same lender can be a great way to save money and simplify the application process.
However, it's important to compare all your options when considering a new mortgage deal. Thus, we advise you to do your research to find the best deal ensure you're making the best decision for your needs.