UK Residential: Moving your Mortgage

Gone are the days when people stayed loyal to a mortgage provider throughout the full term of the loan.

Nowadays the mortgage marketplace has become ferociously competitive and switching your mortgage is commonplace and relatively straightforward. It is advisable to review your mortgage borrowings every three years to ensure that you are still being offered the best and most appropriate product for your needs.

There are many reasons you may wish to change provider – you may be seeking a better interest rate, adjusting your term or releasing equity. Whatever your reasons, you can be sure that there will be a product suited to your circumstances.

With interest rates settled at a historically low level, mortgages are costing a fraction of what they did just a few years ago. A mortgage interest rate of 4.85% will save you a significant 17% compared to a rate of 5.75%. That’s over £1,200 per year on a £130,000 mortgage. Apply this saving to your capital repayment and you will knock years off your term, resulting in further interest savings.

Many people are cashing in on the high property values we have seen build in recent years by releasing equity in their home – primarily to pay off more costly borrowings (credit cards for example), undertake home improvements, or to invest in buy to let property.

There are a number of innovative mortgage products which have become the norm over the last few years – as well as fixed, variable and capped rate mortgages, offset mortgages and current account mortgages are now extremely popular.

An independent mortgage broker, like Fuel, will be up to date with the latest deals available and help you understand your options. They will also undertake all of the necessary research on your behalf. Some of the larger broker firms, like Fuel, also have access to exclusive products which are unavailable on the high street.

Independent brokers make their money by selling mortgage products. They do not charge you an hourly rate for advice and so they can be an excellent source of help when you are deciding which mortgage product or approach to take.

As well as offering the full complement of mortgage products, they also offer life insurance products, and an innovative range of additional insurances to ensure that should you be unable to work through illness or injury, or if you are made redundant, that your mortgage payments will be met.

Finally, it is worth remembering that, as with any property transaction, the following costs may be incurred when moving your mortgage:

• solicitors fees and disbursements – allow £500 - £700
• lenders fees – Allow circa £450
• surveyors fees £350 - £750