Remortgaging is the process of switching from one mortgage deal to another. Your property can be remortgaged with your current provider under a different deal, or it can be remortgaged with a new provider, which sometimes gives you access to a better deal. But how easy is it to switch mortgage lenders?

Can you switch mortgages on a fixed-rate deal?

It is usually possible to leave your fixed-rate mortgage early and move it to another lender if you wish, however in most cases, your lender will charge you an early repayment charge and an exit fee if you choose to leave before the end of your fixed term. 

Whether switching mortgages is the right decision depends on whether the costs involved are outweighed by the benefits of being on a better mortgage.

Remortgaging vs product transfers

Switching mortgages doesn’t always mean you change your mortgage lender. Sometimes you may be able to work out a better deal with your current provider that is more suitable for your current situation. In this case, remortgaging is sometimes referred to as a product transfer.

Why might you want to switch mortgage lenders?

There are a number of reasons you might want to switch mortgage lenders.

Your current deal is ending

At the end of your current fixed rate deal (which is usually two to five years), your interest rate will, in most cases, be reverted to your lender’s standard variable rate, and these tend to be higher than fixed rates.

You want to find a better deal

Your current deal may no longer be competitive and there may be a better interest rate available to you on the market. The loan-to-value (LTV) ratio of your mortgage can change over time, such as if the value of your home increases, in which case you may be eligible for the next band of mortgage rates. 

You want to overpay

By overpaying your mortgage, you could save a lot of money in interest over the term of your deal. However, some lenders will charge a penalty fee for this if you haven’t arranged it in the terms of your deal.

You want to release equity

Remortgaging your home can also be a way to get access to some extra money by releasing equity. In some cases, your current provider will not be able to accommodate that, at least not in your current deal.

How long does it take to switch mortgages?

If you are switching deals with your current mortgage provider, the process can be very quick in some cases. This is because your current provider already has all the details about you that they need, such as your financial history and affordability.

However, if you choose to switch mortgage providers, then the process could take up to eight weeks, as you will need to set up a new account with them, and they will need to run their own financial checks on you before they can approve the new mortgage.

How much does it cost to switch mortgages?

There isn’t a set price for how much it costs to remortgage, but there are extra fees that are usually involved. In some cases, the total fees may only be a few hundred pounds, but in some cases, this figure can run into the thousands. 

While you are still within the terms of an existing deal, there will usually be an early repayment fee if you wish to switch before the term ends. This is usually calculated as a percentage of the remaining amount on your mortgage.

There is usually a small exit fee when leaving any mortgage deal, even on a standard variable rate, and a deeds release fee.

If you are switching to a new provider, there will likely be solicitors’ conveyancing fees, although some lenders may cover this cost for you as part of the deal. If you are staying with the same provider but just switching deals, there are no conveyancing fees.

When arranging the new deal, there will be an arrangement or application fee, and there may be a booking fee and a valuation fee.

How easy it is to switch mortgages depends on several factors, but the most important takeaway is that it is possible, if switching is the right choice for you in the long term. One way to make the whole process easier is to use a specialist mortgage broker who can find you the best deals on the market and facilitate the process.