Remortgage with the same lender?

In this brief guide, we are going to briefly discuss the pros and cons of getting a remortgage with the same lender.

What is a remortgage?

A remortgage is when you pay off your current mortgage balance with a new mortgage. 

People remortgage for a variety of reasons including:

• To save on mortgage interest
• To downsize to a smaller home
• To purchase another home
• To release equity

When you may want to consider getting a remortgage with the same lender?

• A good introductory rate: You may consider getting a remortgage with the same lender If you are on an introductory rate and you want to keep this rate but move your mortgage to a new property.

• Bad credit: If you have bad credit, maybe you incurred it after you got your initial mortgage then getting a remortgage with the same lender may not be such a bad idea as the mortgage lender will have a first-hand account of your ability to repay your mortgage on time and is more likely to offer you a remortgage than other lenders.

• Mortgage affordability changed: If your mortgage affordability has changed since you got your initial mortgage then you may want to consider getting a remortgage with your current lender as they may be more likely to offer you a remortgage given your current circumstances.

• High early repayment fees: If your current mortgage has very high early repayment fees when you may have no choice but to remortgage with your current mortgage lender. In some cases, the mortgage lender will waive the early repayment charges and even offer free legal services when your remortgage with them.

• Good mortgage rate: If the mortgage rates offered by the mortgage lender is a good mortgage rate then you may see no need in leaving your current mortgage lender and hence you may want to remortgage with them.

• Porting your mortgage: If your mortgage lender offers to port your mortgage to a new property then you may find this much easier than having to get a new mortgage. It may also be cheaper. 

Pros of getting a remortgage with the same lender

Some of the prose with remortgaging with the same mortgage lender include:

• Mortgage lenders are more likely to offer you favourable deals if you remortgage with them. This could be discounted or no early repayment charges, free legal fees, mortgage cashback offers etc.
• Remortgaging with the same mortgage lender may also save you a lot of money as mortgage fees could be very high and the early repayment charge on your mortgage could be equally as high.
• You may be more likely to get a remortgage from your current mortgage lender as they already have a track record of your repayment history based on dealing with you.
• Remortgaging with the same lender may save you a lot of time as the current mortgage lender already has all of your details
• Some mortgage lenders may not put you through a credit check or carryout extensive mortgage affordability checks if you already have a mortgage with them.

Cons of getting a remortgage with the same lender

Below are some of the cons of getting a remortgage from the same mortgage lender.

• You may miss out on better mortgage deals on the market: By getting a remortgage with the same mortgage lender you may miss out on much better mortgage deals which may be better suited to you. Before deciding on if you will get a remortgage with the same mortgage lender or not you may want to consider speaking with a mortgage broker to analyse your mortgage options.
• You may missout on offer such as cashback, no legal fees which other mortgage lenders offer.

• A new mortgage lender may value your property at a much higher rate than your current mortgage lender which could mean you end up with a very favourable loan to value rate.

Will you need a credit check if you are remortgaging with the same lender?

If you are remortgaging with the same lender then you may not need to be credit checked but this depends on the mortgage lender who you currently have your mortgage with.

Mortgage lenders have a responsibility to check that you can repay any funds which you borrow from them.

This means some mortgage lenders may credit check you even if you are currently borrowing from them.

If you are worried about being credit checked and how this may affect your mortgage affordability then speak to a mortgage broker about it.

What fees will you ay if you remortgage with the same lender?

If you remortgage with the same lender you may avoid paying a lot of fees such as conveyancing fees, mortgage valuation fees, and other fees which may be associated with a new mortgage account.

This is because when you remortgage with the same lender this is treated as a product transfer and usually involves less administration work by the mortgage lender and hence fewer costs to you.

Some mortgage lenders will also offer you a discount on your early repayment charges or totally remove any early repayment charges which may have been due when you settle your mortgage early.

Some mortgage lenders will also offer cashback and free legal service if your remortgage with them.

Will you need a new conveyancer to remortgage with the same lender?

If you are remortgaging with the same lender then you will usually need a new conveyancer as most of the legal work involved can simply be handled by the mortgage lenders conveyancer at no cost to you.

How long does it take to remortgage with the same lender?

When remortgaging the process can usually take a month or even 2 months but if you are remortgaging with the same lender then this could take as little as a few days if you have all your documents ready.

Will you need a valuation if you get a remortgage with the same lender?

If you get a remortgage with the same lender then you will usually not need another mortgage valuation carried out except there has been a substantial rise in your property prie since you took out your original mortgage or maybe the property market has crashed and there has been a substantial fall in property prices.

In these cases, the mortgage lender will likely undertake a mortgage valuation to be sure of what the loan to value is on the remortgage.

Use a remortgage calculator

You may be able to use a remortgage calculator to see what your monthly mortgage repayments could be with a remortgage.

If you get a remortgage you should be aware that the numbers produced by the calculator are only for guidance and do not reflect your mortgage affordability.

Use a remortgage broker to remortgage

You may want to consider using an independent mortgage broker to get a mortgage.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.

This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. 

Once you have found a remortgage product that you are satisfied with  then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month.

It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your remortgage with the help of a conveyancer.

Your conveyancer will manage the transfer of funds to your old mortgage lender.

FAQs: Remortgage with the same lender

In conclusion, whether you should remortgage with the same mortgage lender or switch mortgages will depend on your own circumstances and what your future plans are.

You should remember, a mortgage may be the biggest debt you ever take on in your life and it is secured against your home.

In this brief guide, we are going to briefly discuss the pros and cons of getting a remortgage with the same lender.

If you have any questions or comments please let us know.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.