When the time comes to remortgage, staying with your current lender may seem like the safe and hassle-free option. It may not, however, be the overall best choice for your financial situation. This article explores the factors to consider when deciding whether to stay with your current lender or explore alternative options, highlighting the potential benefits of shopping around and seeking advice from a mortgage professional.
The appeal of staying with your current lender
Staying with your current lender when you remortgage can be appealing for several reasons. Firstly, there's a level of familiarity and comfort in continuing with the same lender. You already have an established relationship, and you may have had positive experiences with their customer service and support.
Another advantage is the potential for a smoother transition. By staying with your current lender, you can avoid the hassle of switching to a new provider, which involves completing paperwork, providing documentation, and potentially facing additional fees and charges.
Additionally, your current lender may offer incentives to encourage you to stay, such as loyalty discounts, reduced fees, or exclusive mortgage products. These benefits can make staying with your lender financially advantageous, especially if they are willing to match or beat competitor offers.
Moreover, if your financial situation hasn't significantly changed since you initially obtained your mortgage, your current lender may have a better understanding of your circumstances, making the remortgaging process more straightforward and efficient.
The drawbacks of staying with your current lender
While staying with your current lender when you remortgage may seem convenient, there are several drawbacks to consider. Firstly, by not exploring other lenders, you may miss out on potentially better mortgage deals from a comprehensive range of lenders across the market. Different lenders offer varying interest rates, terms, and features, and by limiting yourself to your current lender, you may not be getting the most competitive offer.
Furthermore, your existing lender may not prioritise existing customers with the same level of incentives and benefits they offer to new customers. Loyalty discounts and exclusive deals are often used as enticements to attract new borrowers rather than reward existing ones. This means you might be missing out on better rates or terms available elsewhere.
Another disadvantage is that your circumstances or preferences may have changed since you obtained your original mortgage. Sticking with your current lender may limit your options for customization or flexibility, such as the ability to access additional borrowing, switch to a different mortgage type, or take advantage of new features.
The benefits of shopping around
Shopping around for a remortgage can offer several benefits that may outweigh the convenience of staying with your current lender. Firstly, shopping around allows you to tap into a wider range of mortgage products and options. Different lenders may offer specialised mortgages tailored to specific needs, such as first-time buyers, self-employed individuals, or those with unique financial circumstances. By expanding your search, you increase the likelihood of finding a suitable mortgage for your requirements.
Another advantage is the potential for more favourable incentives and benefits. Lenders often introduce attractive deals, such as cashback offers, reduced fees, or discounted rates, to attract new customers. By exploring different lenders, you can take advantage of these promotional offers, potentially saving money upfront or throughout the mortgage term.
In addition, exploring different options and shopping around empowers you to negotiate with your current lender. By presenting alternative offers from other lenders, you can initiate a discussion with your existing lender and request them to match or enhance the terms you have found elsewhere.
The role of a mortgage adviser
A mortgage adviser can assist in assessing the risks and benefits of staying with your current lender versus switching to a new one. They can negotiate on your behalf, ensuring you secure the most favourable terms and conditions. Their objective advice and personalised approach can save you time, effort, and potentially money, helping you make an informed decision and secure the most suitable mortgage deal.
There can be an early repayment charges that you need to consider.
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Your home may be repossessed if you do not keep up repayments on your mortgage.
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