Question
The moment I had been dreading had arrived. My wife and I are about to finish the first two years of our mortgage, and we need to look for a new deal. What is the process?
Will we be subject to the same checks and need to provide the same documents as we did when we purchased our property? Or can we bypass this because we are already on the ladder? Any advice on how to find a new fixed rate?
Darren’s answer
This is a common area of concern for those in your position, but it is certainly not an area to worry about.
In terms of options available, there are generally two options, depending on your circumstances.
Stay with current lender (product transfer)
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- Moving the product can be easier and faster, however, there may be more competitive offers available that can save you more money over the course of time.
- The benefits are that this is a faster process with less involvement, as lenders typically do not require a new appraisal, underwriting or proof of income.
- There are often no legal or appraisal fees, and lower administrative costs
- The broker will still check the affordability and suitability of transporting the product
Please also note that if your situation changes such as income or credit, completing a product transfer may be a more convenient option, subject to the above checks.
In terms of disadvantages, there will be fewer options and perhaps a higher rate than what is available in the market.
Return the mortgage to the new lender
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- Remortgaging means you have access to the entire market to secure the best rates and terms to suit your circumstances
- There are also no-fee deals, which could mean the cost of remortgaging is the same as staying with your current lender, although you may get a better rate.
- If your property has increased in value, an appraisal may give you access to products with a better loan-to-value (LTV) rate.
It is important to keep in mind that this is a complete application and will require a credit check and will generally take four to eight weeks. If you have the time, this might be an avenue to explore to save money.
You can start the process as early as six months before your current deal expires, which will give you time to make sure you know all the information before making a decision.
Contact a mortgage broker who can review what your current lender is offering, as well as access the market to find the lowest possible rate.
