Should You Remortgage With The Same Lender?

Is your current mortgage deal about to come to an end? If the answer’s yes, it’s important that you think about your next steps ahead of time. In fact, you should start to explore your options at least six months before your current deal expires to make sure you find a product that works for your current circumstances. 

When this time does come, you’ll have the option to remortgage with an entirely new lender or stay put. If your experience with your current lender has been positive, the latter of these options will likely feel the most logical. However, while staying put can be convenient, it’s important to question whether it’s actually the best option. We’ve broken down the key considerations you’ll need to make in this article so that you can work out if remortgaging with the same lender is right for you.

How Remortgaging With The Same Lender Works

Whether you opted for a 2-year, 5-year, or an even longer fix, when your current fixed-term mortgage deal expires, your lender will usually move you onto their standard variable rate (SVR) by default. SVRs are usually higher than the rates you might get with a fixed-term mortgage, so this is rarely the most cost-effective option and can result in higher monthly payments.

However, rather than automatically swapping to an SVR, you can remortgage with the same lender by opting for a product transfer. This is when your lender allows you to switch from your expiring fixed-term deal to a new one. 

Advantages Of Remortgaging With The Same Lender

A product transfer can be an appealing choice if you value convenience and continuity. The key benefits of remortgaging with the same lender in this way include:

It’s Usually Simpler

The main advantage of remortgaging with the same lender is simplicity. A product transfer is usually much quicker than switching lenders because your current lender will already have most of the information they need to determine eligibility on file. You might need to provide some updated affordability details, but for the most part, it’s a simpler process than a full remortgage with a new lender. In fact, in most cases, a product transfer can be completed in a matter of days.

You Might Be Rewarded For Loyalty By Your Lender

Lenders know that you might be offered better deals elsewhere (more on that shortly…) and, in turn, offer loyalty incentives to customers who opt to stay with them. These incentives can range from reduced fees to products only available to product transfer customers. If you’ve been happy with your lender over the course of your current deal, these rewards might make a product transfer genuinely your best option.

Disadvantages Of Remortgaging With The Same Lender

Despite the convenience of remortgaging with the same lender, doing so does have its downsides, and there are several drawbacks to bear in mind before you rule out other options: 

You Might Miss Out On Better Rates

The most obvious disadvantage of remortgaging with the same lender is that you could be missing out on more competitive rates elsewhere. Just because your current lender was the best option when you took out your current deal, it doesn’t mean this will still remain the case. Other lenders may offer lower interest rates or more flexible products that better suit your current situation. Don’t miss out on savings just because of convenience.

Fewer Product Options

Even with loyalty incentives, existing customers are sometimes limited to a narrower range of products. For example, you may find that longer-term fixed deals or specialist products are only available if you switch to a different lender. This can be particularly key if you’re looking to release some equity from your home, for example, to fund home improvements. By making sure you are exploring options from all lenders, you can feel confident that you’ll be able to find a mortgage product tailored to your needs.

Find Out What’s Right For You

With clear pros and cons to remortgaging with the same lender, the key to knowing whether a product transfer is the best option is to make sure you’ve explored all of your options. In some cases, this process might uncover a deal that’s better than anything your current lender can offer, or confirm that a product transfer is the best option for you. Either way, you’ll be happy knowing that you balanced convenience with potential savings and have the right fixed-term solution moving forward.

At Mewstone Mortgage Advice, our local mortgage advisers are on hand to help you explore all of your options, assess any potential savings, and find a remortgage deal that works for you. We have access to the whole of the market and will regularly search the market to find you the most suitable product, both now and in the future. Simply get in touch via 01752 938933 or book a quick call at a time that suits you and we can help you determine whether you should remortgage with the same lender.