Mortgage Switching also known as a ‘Product Transfer’ is a process where an existing borrower changes their current mortgage deal to a new and better rate with their existing lender. This normally happens when an existing mortgage deal is coming to an end.
When an existing lenders deal comes to an end, mortgage borrowers will end up paying a lenders SVR – or ‘Standard Variable Rate’ which is almost always considerably higher than the initial deal. This will of course increase monthly mortgage costs.
most UK mortgage lenders SVR is between 3.74% – 5.5%, most competitive lending rates are between 1.75% – 2.8% ! (there are huge savings to be made by acting quick)
Switching has become more popular in UK both from a consumer and lender perspective. Lenders are keen to retain their existing borrowers and are offering highly competitive switch rates.
For borrowers, mortgage switching can take place up to 90 days in advance of a product expiring – you can generally secure a better rate earlier and start saving earlier.
Whilst you are NOT able to change the terms of your existing mortgage (during a product switch), such as loan amount, loan term, mortgage parties etc, outlined below are the key benefits of switching.
Switching your Mortgage – the Key Benefits
We have created a very simple Switch calculator that will tell you exactly how much you can save by switching, why not give it a try
You can also read this excellent article about the benefits of Remortgaging.