There has been a lot of change in the mortgage market over the last decade, with tighter controls over lending criteria, more scrutiny around affordability and interest rates tumbling to record lows. But one question we get asked a lot is: can I force my mortgage lender to offer me a better deal?
Before I answer that question, though, it’s important to make the point that whenever you’re considering entering into a significant financial commitment you should always talk to a professional adviser about a better deal so you know you’ve got all the information you need to make an informed choice.
So can you force your lender to swap you to a better deal? The short answer is that you can’t force a lender to do very much at all as long as they’re dealing with you fairly and are operating within the parameters of the law, their own terms and conditions and the Financial Conduct Authority regulations that govern them as a lender.
In some cases, though, it’s worth asking the question – because what is certainly true is that there isn’t a mortgage lender I know of that will voluntarily offer you a sweeter, cheaper deal.
If you’re on a fixed-term deal and like the look of a new product your lender is offering, the chances are that unless you’re prepared to go through a new application (and potentially pay an early exit fee), you’re going to have to stick with what you’ve got until your deal runs out.
(It’s worth bearing in mind that most lenders will allow you to arrange the mortgage you plan to move to 3 to 6 months before your existing deal expires so the transition is seamless).
However, if your fixed product has already expired and you’re on a standard variable rate mortgage, there’s certainly no harm in asking to move to a better deal – usually another fixed term or fixed rate product.
You might have heard the term ‘mortgage prisoners’. These are borrowers who have come to the end of their fixed mortgage and who are unable to move to a new lender because they will no longer pass the affordability tests that are now part and parcel of a mortgage application.
In these cases, the Government stepped in some time ago to ensure lenders allowed borrowers in this situation to move to more affordable loans.
There are some lenders that will, as a matter of policy, allow you to move to one of their alternative products without having to go through an application if you are on their standard variable rate – and if you’re in this position then it’s certainly worth getting in touch with your lender to see if this is a possibility for you.
All the publicity around stricter lending in the mortgage market has left many people believing – wrongly, in some cases – that they are stuck in a variable rate mortgage until they’re able to successfully apply for a new mortgage elsewhere.
Working alongside a professional adviser, you will be able to work out whether it’s in your best interests to move lenders, stick with your current lender on a different product or exit early from a fixed deal in order to save money over the long term.
If you’re in doubt about the best way to approach your mortgage needs, why not get in touch and speak with a member of our friendly team. We’ll be happy to give you a professional steer on your next steps and we’d be delighted to help you to make the decision that’s right for you not just now but in years to come, too.
Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority
Your property may be repossessed if you do not keep up repayments on your mortgage.
Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.