Should I Remortgage Or Stay With My Current Lender?

When your mortgage deal is coming to an end, you may wonder whether you should remortgage with a new lender or simply take a new deal with your existing provider. There isn’t one right answer for everyone. 

The best option depends on the rates available, your circumstances, the costs involved and what you want from your next mortgage. Comparing both options before making a decision can help you avoid automatically moving onto a less competitive deal.

What does remortgaging mean?

Remortgaging means moving your mortgage from your current lender to another lender, usually without moving home.

You could potentially secure a different interest rate, change the length of your mortgage term or choose a product with features that better suit your circumstances.

However, remortgaging isn’t always necessary. Your current lender may offer a new deal that is competitive and suitable for your needs.

When could remortgaging be worth considering?

One of the main reasons homeowners consider remortgaging is to find a more suitable interest rate. Your financial circumstances may also have changed since you took out your existing mortgage. 

Perhaps your income has increased, you’ve paid down a significant amount of your mortgage or your property’s value has risen. These changes could affect the mortgage products available to you.

You may also want to change your mortgage term, raise additional funds for a particular purpose or consider different mortgage features. Comparing the wider market can therefore reveal options that aren’t available from your existing lender.

Don’t just compare interest rates

When comparing mortgage deals, looking at the headline interest rate is important, but it isn’t the whole picture.

Consider the arrangement fee, valuation or legal costs, early repayment charges and any other costs associated with changing your mortgage. You should also think about the mortgage term, overpayment options and other product features.

A mortgage with a slightly lower interest rate isn’t necessarily better value if its fees are significantly higher.

What if your circumstances have changed?

If your financial circumstances have changed since you took out your current mortgage, it may be particularly worthwhile to review your options.

Changes to your income, employment, debts, household or property value could influence how lenders assess your application. Your existing lender may be suitable, but another provider could potentially offer a mortgage that better fits your current situation.

This is one reason why reviewing your mortgage before your current deal ends can be useful.

Should you get mortgage advice?

You don’t have to decide between staying and remortgaging based on your current lender’s offer alone.

A mortgage advisor can look at your circumstances and compare potential options, helping you understand the costs and benefits of changing lender versus staying where you are.

It’s also worth starting the process before your existing deal ends. This gives you more time to compare options and potentially secure a new rate before your current mortgage reverts to your lender’s standard variable rate.