When your current mortgage deal is coming to an end, you have two main options: you can either stay with your current lender and do a product transfer or switch to a new lender through a remortgage. Both have their own advantages and disadvantages, and the best choice depends entirely on your personal financial goals and circumstances.
When should you start looking?
Timing is crucial to ensure you get the best deal. We recommend you start exploring your options about three to six months before your current deal expires. This gives you plenty of time to compare different offers, secure a new deal, and avoid being moved to your lender's more expensive Standard Variable Rate (SVR).
What is a mortgage product transfer?
A product transfer is simply when you switch to a new mortgage rate with your current provider. This is often the quickest and easiest option, as you are not changing lenders.
- Pros:
- Simplicity and speed: The process is typically much quicker and requires far less paperwork. Your lender already has your details, and a new credit check or property valuation may not be required.
- Lower costs: Many lenders do not charge a valuation or legal fee for a product transfer, making it a potentially cheaper option in the short term.
- Cons:
- Limited choice: You are restricted to the products your current lender offers, which may not be the most suitable or competitive on the wider market.
- No additional borrowing: A product transfer will not allow you to release equity from your home for home improvements or debt consolidation.
What is remortgaging?
Remortgaging is when you switch to a new mortgage product with a different lender. This opens up the entire market, giving you a greater number of options.
- Pros:
- Access to the entire market: By shopping around, you could find a much better interest rate and a product that is perfectly suited to your needs.
- Greater flexibility: Remortgaging allows you to change key aspects of your mortgage, such as the term, repayment method, or to release equity for a project.
- Cons:
- More involved process: The process takes longer and requires a new application, credit checks, and property valuation.
- Higher potential costs: There will likely be legal, valuation, and arrangement fees, although a competitive deal might still save you more money in the long run.
How a broker can help you
While it may seem simple to just accept your current lender's product transfer offer, it may not be the best financial move. We are uniquely positioned to help you because we can:
- Access the entire market: We can quickly compare your current lender's product transfer offer against thousands of deals from other lenders – many of which are not available to the general public.
- Analyse the true cost: We'll help you look beyond the advertised interest rate. We crunch the numbers to see which option is truly cheaper once all fees (like legal, valuation, and arrangement costs) are factored in.
Hidden benefits of remortgaging
Remortgaging is often seen as just a way to get a new rate, but it can be a valuable opportunity to align your mortgage with your life goals. It could be a perfect time to:
- Release equity: Fund a home renovation, consolidate debt, or help a family member get on the property ladder.
- Change your mortgage terms: Alter your mortgage term to pay it off faster or switch to a different repayment type.
- Resolve a financial issue: Move to a new lender if your current one no longer meets your needs.
Book your free initial no-obligation consultation with one of our expert mortgage advisors today.