As your mortgage term comes to an end, you face the important question of whether to remortgage with your existing lender or switch to a new one. While there are advantages to staying with a familiar lender such as an existing relationship and simpler paperwork, rates and fees often improve by shopping around. Before deciding, evaluate your needs and priorities to determine the best path forward. It is often asked Can You Remortgage With The Same Lender?
Staying with your current lender for a remortgage means less hassle and uncertainty. The application process will be simpler since they already have your information on file. You know what to expect in terms of customer service and processes. However, rates and fees may have improved since you last locked in, and your existing lender is unlikely to proactively offer you their best new deal. Loyalty does not always mean the lowest costs.
Shopping the open market exposes you to competitive rates and deals that could save thousands over the life of your mortgage. A new lender may offer incentives to win your business that your current one does not. While the application will require some additional paperwork, the potential savings could well be worth the effort. Do not assume your current lender has the best rates just because you have history – shop around to be sure.
In the end, you must review both options objectively and determine whether staying or switching makes the most financial sense for your situation. Remortgaging is a major financial decision, so take the time to explore and evaluate carefully. Loyalty is admirable, but do not let it cost you money that could be better spent elsewhere. Choose the lender that overall offers you the best combination of low rates, fees, and service.
Pros of Remortgaging With Your Existing Lender
Remortgaging with your existing lender has several benefits worth considering.
Lower fees
Remortgaging with the same lender often means lower arrangement and valuation fees since they already have your information on file and are familiar with the property. They may waive or reduce certain fees as an incentive for your continued business. This can save you hundreds of dollars upfront.
Speed and convenience
The remortgage process will likely be quicker and easier since the lender has all the necessary details about your current mortgage and property. There are fewer forms to complete and less paperwork to gather. Approval may also be faster since they are already familiar with your financial situation and credit history.
Existing relationship
You have an established relationship with your current lender which can make the remortgage process feel more comfortable and personalized. They understand your unique needs and priorities. You can also negotiate based on your history as a loyal customer.
Possible incentives
Some lenders offer incentives for remortgaging like cashback, free valuations, or reduced product fees. Since keeping your business is in their interest, they may be willing to provide extra perks. It never hurts to ask about any current remortgage offers or loyalty programs you may be eligible for.
In summary, while shopping around at different lenders could result in a lower interest rate, remortgaging with your existing lender does have some worthwhile benefits that could save you money and time. Evaluate your options carefully based on your own priorities and needs.
Potential Discounts and Deals for Loyal Customers
As a loyal customer, you may be eligible for additional discounts and incentives when remortgaging with your current lender. Many lenders offer loyalty programs that can reduce fees or interest rates for existing borrowers.
Lower Interest Rates
Your lender may offer you a lower interest rate when you remortgage, especially if you have a good payment history. They value your business and want to retain you as a customer. A lower rate can save you thousands over the life of the new mortgage.
Reduced Fees
Lenders often waive or reduce certain fees like application or appraisal fees for returning customers. The lender already has most of your information on file and is familiar with the property, so less work is required on their end. These fee reductions provide instant savings at closing.
Cash Back or Points
Some lenders offer cash back, gift cards or loyalty points when you remortgage your home. While typically not a large amount, it is still money that can be used to offset other closing costs or monthly expenses. Check with your lender to see if they offer any loyalty incentives or rewards programs for remortgage.
Streamlined Process
Remortgaging with your existing lender generally provides a more straightforward process. Since the lender already services your current mortgage, they will have easy access to information needed to review and approve your new mortgage application. This can speed up the process and limit extra paperwork on your end.
In summary, remortgaging with your current lender has several benefits worth considering. Be sure to inquire about any discounts, fee reductions or loyalty programs available for existing customers. With a streamlined process and potential cost savings, staying with your current lender could be the simplest choice when it’s time to remortgage.
Key Questions to Ask Before Remortgaging
When considering remortgaging with your current lender, there are a few key questions you should ask yourself:
Do they offer competitive interest rates?
Your lender is accustomed to your financial situation and credit history, but that doesn’t mean they will necessarily offer you the best available interest rate. Compare their rates to other lenders to ensure you’re getting a good deal. If they can’t match or beat other offers, you may be better off switching lenders.
Are there any fees for remortgaging?
Most lenders charge arrangement fees for setting up a new mortgage. Ask your lender about any fees for re-mortgaging to see if they are reasonable and comparable to other lenders. High fees could outweigh any interest savings, in which case remortgaging may not make financial sense.
Will remortgaging affect the terms of your mortgage?
When you remortgage, you are essentially taking out a new mortgage to pay off your existing one. Check if the lender plans to change any key terms like the mortgage type, length, or repayment method. Make sure any new terms still suit your needs and financial situation.
Will remortgaging impact your credit score?
Each new application for credit can temporarily lower your credit score slightly. Remortgaging with your existing lender may have a smaller impact on your score versus switching lenders, as they already have your details on file. However, if they need to do another hard credit check, it could still affect your score. Ask if they will do a ‘soft’ or ‘internal’ check instead, which has no impact.
By asking the right questions before you remortgage, you can make sure you get the best deal from your current lender or determine if switching lenders may be in your better interest. Evaluate all your options to find an affordable mortgage that fits your needs.
Familiarity With Your Financial Situation and Property
Remortgaging with your existing lender has some advantages due to their familiarity with your financial situation and property. As your current mortgage provider, they have a comprehensive understanding of:
- Your repayment history and credit score. If you have a good track record of making payments on time, your lender will likely view you as a low-risk borrower. This can help in securing a competitive remortgage rate.
- The value and condition of your property. Your lender has evaluated your property before and will not require a new valuation or survey, speeding up the remortgaging process. They are also aware of any major renovations or improvements made that could increase your property value.
- Your personal circumstances. If your lender has a long-standing relationship with you, they will have a good understanding of your income, expenses, dependents, and any events that could affect your ability to repay a new mortgage. This insight can facilitate a smoother application and underwriting process.
However, there are some potential downsides to consider with remortgaging with your existing lender:
Limited Choice of Deals
You may miss out on more attractive rates and fees available from other lenders competing for your business. It is a good idea to compare other offers to ensure you get the best overall remortgage package.
Complacency
Your current lender may not work as hard to win your business or provide you the most competitive deal. They may assume you will stay with them out of familiarity and convenience. Do not hesitate to mention any better offers from competitors to prompt them to match or beat those terms.
In summary, while remortgaging with your current lender has its benefits thanks to their knowledge of your situation, make sure you still do your due diligence. Compare other offers in the market to motivate your lender to provide you with the most affordable remortgage deal possible. With an informed and proactive approach, you can enjoy the advantages of staying with a familiar lender, without potentially overpaying.
Cons of Not Shopping Around at Remortgage Time
When your fixed-rate mortgage deal comes to an end, remortgaging with your existing lender may seem like the easy option. However, there are some significant downsides to not shopping around at remortgage time:
Lack of Competitive Rates
Your current lender is unlikely to offer you their best available rate unless you push for it. They know you may see remortgaging with them as the most convenient choice and will often not proactively offer their lowest rates. By comparing deals from other lenders, you can access much more attractive interest rates that could save you thousands over the deal period.
Restricted Product Range
Most lenders only offer a select range of mortgages from a panel of providers. By shopping around the entire mortgage market, you open yourself up to a much wider range of products with different features. You may find a deal better suited to your needs that you would have missed if you stayed with your existing lender.
Loyalty Not Rewarded
Do not expect your current lender to reward your loyalty. Although they may talk about ‘loyalty discounts’ or ‘existing customer rates,’ the reality is that the best rates are usually reserved for new customers. Your lender knows you may perceive switching as inconvenient, so they do not need to offer their best rates to keep your business. The most competitive rates will come from a lender trying to win your custom.
Complacency Leads to Higher Costs
It is human nature to gravitate towards the easy option, but when it comes to your mortgage, this can be an expensive mistake. The lender you chose for your initial deal may not continue to offer you the best value over the long run. By making the effort to compare the whole market at each remortgage, you can avoid becoming tied to a lender offering higher rates and ensure your mortgage always remains as affordable as possible. Remortgaging with the same lender for convenience alone could cost you dearly over the lifetime of your mortgage.
When It May Be Better to Switch Lenders
When determining whether to remortgage with your current lender or switch to a new one, there are several factors to consider. In some situations, it may be in your best interest to change lenders.
Interest Rates
Interest rates are the driving force behind any mortgage. If your current lender is unable or unwilling to offer you a competitive rate on your new mortgage, it may benefit you financially to look elsewhere. Compare the rates being offered by other major lenders to determine if you could save substantially by switching. Even a small difference of 0.25% in the interest rate could save you thousands over the lifetime of the loan.
Fees
The fees charged by lenders, like application or appraisal fees, can vary and significantly impact the overall cost of your mortgage. Shop around at different lenders to compare their fee structures. If another lender is offering considerably lower fees, the savings may offset any convenience of staying with your current lender.
Additional Products
Some lenders may require you to purchase additional products, like homeowner’s insurance or investments, as a condition of approving and funding your mortgage. These additional obligations can cost you in the long run. Look for lenders that allow you flexibility in choosing other providers for related financial products.
Customer Service
The level of customer service and support offered by lenders can differ greatly. If you have had poor experiences with your current lender’s customer service, that alone may motivate you to switch to another lender that is known for providing exemplary service and support to their customers. Exceptional service and quick response times can give you peace of mind in the mortgage process and over the life of the loan.
In summary, while there are benefits to remaining with your current lender, there are also compelling reasons why switching to a new lender for your mortgage could be advantageous. Compare all aspects of lenders and mortgage offers to determine what option is optimal for your needs and financial situation. The choice that is right for your neighbor or friend may not be the best choice for you. Do your research and choose wisely.
Conclusion
With the terms of your existing mortgage likely not ideal and interest rates currently low, now could be an excellent time to consider remortgaging. Before deciding to stay with your current lender or switch to a new one, carefully weigh the pros and cons of both options based on your unique financial situation and priorities.
A remortgage is a big financial decision, so take your time to understand all the implications to find an option that suits you best in the long run. While remortgaging with your existing lender may seem convenient, make sure not to overlook potentially better deals from competitors. Do your research, crunch the numbers, and choose what will allow you to pay off your home sooner and save money. The choice is ultimately up to you.
People Also Ask Questions About Can You Remortgage With The Same Lender
Can I remortgage with the same lender?
Yes, it is possible to remortgage with the same lender. Many mortgage providers offer their existing customers the option to remortgage when their current mortgage deal comes to an end or during specific periods of their mortgage term.
Why would I consider remortgaging with the same lender?
Remortgaging with the same lender can be a convenient option as they already have your information and financial history on file. Additionally, they may offer special incentives or loyalty deals for existing customers, which could include lower fees, reduced interest rates, or faster processing times.
When is the best time to consider remortgaging with the same lender?
The ideal time to consider remortgaging with the same lender is typically when your current mortgage deal is about to expire or during periods when your lender may offer special promotions or incentives for remortgaging.
Can I negotiate better terms with my current lender when remortgaging?
Yes, you can negotiate better terms with your current lender when remortgaging. Since you are already their customer, they may be open to discussing terms such as interest rates, loan duration, and any associated fees to retain your business.
Do I need to go through a credit check when remortgaging with the same lender?
In some cases, lenders may offer a product transfer or remortgage deal that does not require a full credit check, especially if you have a good repayment history with them. However, it’s essential to confirm with your lender if a credit check will be necessary.
