How Easy Is It To Switch Mortgages?

Easier than most people expect, and the new lender does nearly all of it. Switching to a new lender is a remortgage, takes around two months start to finish, and often comes with free conveyancing and a free valuation as an incentive.

Staying with your existing lender on a new rate is a product transfer — quicker still, sometimes days, with no legal work and no affordability reassessment.

The thing that costs people money is not difficulty but timing. Start looking around six months before your current deal ends: most offers can be held for that long, so you can secure a rate and still take a better one if it appears.

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Key Takeaways

• Switching mortgages is a straightforward process, with your new lender handling paperwork, solicitor appointments, and keeping you updated throughout the transition. Cashback incentives may also be available.
• A mortgage switch, also known as a remortgage, allows homeowners to move their mortgage to a different provider, offering opportunities to borrow more, amend terms, or repay the mortgage.
• Common reasons for switching include taking advantage of better interest rates, borrowing more, or changing existing mortgage terms. It can lead to significant interest savings, especially when a lower rate is available with a new lender.
• The timeline for completing a mortgage switch is typically around two months, although it can be as quick as two weeks with an electronic survey. The process duration depends on the complexity and conveyancing work involved, ultimately relying on solicitors.

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How Easy Is It To Switch Mortgage?

Switching mortgages is a straightforward process. Your new lender will handle most of the work, including appointing a solicitor and arranging a valuation. While it can take up to two months, your mortgage adviser will stay in touch, ensuring a smooth transition. You may even get some cashback.

What is a Mortgage Switch?

A Mortgage Switch is also known as a Remortgage and is when a homeowner moves their mortgage from one provider to another. When switching, the homeowner may borrow extra funds, amend their terms, or repay their Mortgage.

Reasons to Switch Mortgage to a New Lender?

Most people switch mortgage to take advantage of better interest rates available with other lenders. You can also switch to borrow more, or change the terms of your existing mortgage.

You may decide to reduce the overall term and pay more.

For example, say your current lender can only offer you a 5.5% two-year fixed rate, while another lender is offering 4.5% for the same term. By moving to the new lender via a mortgage switch, you would save interest on your monthly repayments.

Use the calculator below to see how a lower rate could change your monthly repayment and the total interest you pay over the term.

How Long Does a Mortgage Switch Take to Complete?

You can complete a mortgage switch in around a 2-month timeframe. This will depend on how straightforward the case is and how quickly the conveyancing work will take.

It is possible to switch in as little as 2 weeks. However, to do that, an electronic survey will be required.

It is done to the lender to decide what survey to perform, based on your Loan to Value.

The remortgage process usually runs through five stages:

1. Review your mortgage: around 3 months before your current product ends is generally when early repayment charges fall away, making it a sensible time to look at your options.
2. Find a new lender: speak to a mortgage adviser to review your needs and the products available based on your loan to value.
3. Consolidate or borrow more: you verify your income, and your adviser can tell you whether you are able to borrow more for plans such as home improvements or debt consolidation.
4. Legal, valuation and mortgage offer: your adviser instructs a conveyancer, arranges your valuation and issues your mortgage offer.
5. Completion: the legal work is finalised, your old mortgage is closed, the new one opens, and any additional funds are paid to you.

Ultimately, the time required to complete will be dependent on your solicitors.

Can I Borrow More When I Switch Mortgage?

If you have enough equity and pass affordability checks, you may be able to borrow more. When you complete on your mortgage, your solicitor will arrange a mortgage settlement amount to repay your old mortgage.

The money left over after this will be paid to your bank account. You will need to declare your intention to borrow more to your lender.

This is made more possible by switching Mortgage when house value has increased.

The funds can then be used for reasons such as:

• Home improvements
• Debt consolidation
• Raising a deposit for another property
• Gifting funds for your children to buy property
• Car purchase

if you borrow more on your mortgage, you may be spreading the cost over a longer term than a personal loan would. That could mean you pay more interest overall.

This also applies if you are consolidating debts. Although your outgoings might be less overall. You may pay more interest by the end of the term.

Some lenders prevent you from consolidating debts over a term longer than 10 years. Your Mortgage adviser will need to declare the reason why you are borrowing extra. This is to ensure they offer the correct advice.

Can you Switch Your Mortgage Early?

Yes, you can remortgage early and switch at any time. However, you may face an ‘early repayment charge’ until at least 6 months before your current mortgage product expires.

Each Mortgage will be different. You can find your early repayment charges in your Mortgage key facts document.

Who Should You Switch Your Mortgage to?

Seeking Mortgage advice is about what is important to you and your personal circumstances. When it comes to switching, a mortgage adviser will help you to understand what level of stability or flexibility you may need.

Once you and your adviser have established which mortgage product is right for you, they will be able to review their panel of lenders to see who has a Mortgage product that can meet your needs.

Mortgage terms vary from lender to lender, it may not always be a case of who has the cheapest product available.

For example, If you are going to be making overpayments, you may need a Mortgage product that allows for this which may not necessarily be the cheapest.

Property Valuations

If you are considering switching mortgages you will need to have an idea as to how much your property is valued. The valuation figure that you provide to the lender will be used for assessing the application.

The interest rates you are eligible for will be determined by your Loan-to-Value which is calculated using this provided value. However, once you proceed to the application stage, there will then be an official property valuation conducted.

Some properties will have digital valuations, some will have a drive-by valuation.

There are factors that influence which type of valuation you will need, such as:

Equity in your Property

if you have a Loan to Value of less than 60% and are not too close to the bracket, your lender may determine your valuation based on statistics of local sales

If your property valuation is in line with local sales

If the lender thinks your valuation is not in line with sales from the local area and appears that you may have made a mistake then a standard valuation will be conducted. If your valuation comes back in line, you proceed with your application.

If your valuation falls short of what you have stated, then you may need to take a step back and re-review the products that are available now that the valuation figure has been confirmed.

If your valuation is quite a way off what you expected, it may move your Loan to Value to a different product LTV range. That means your interest rate might be higher. Your Mortgage adviser will explain how your valuation has impacted any products you were applying for.

The remortgage market is competitive and often there are incentives available for remortgaging to a new provider. One common incentive is free conveyancing for remortgages.

Advice on Switching Mortgages

When it comes to switching mortgages, seeking advice from an expert is a good idea. A remortgage adviser can help you decide if it's the right choice for you.

They can guide you in finding the best deals, comparing interest rates and fees from different lenders. They'll explain the potential savings and costs involved, so you can make a smart decision and get a better mortgage deal that fits your needs.

So, how easy is it to switch mortgages? It can be very easy, if you are organised and return the essential paperwork quickly, your mortgage adviser will take care of the rest.

That includes surveys, issuing a mortgage offer, and arranging a solicitor.