If you have a mortgage it’s likely you’ve opted for a certain product with your lender, which means you have a particular deal for a set period of time (such as a two- or three-years). Once this time period expires you’ll probably then be transferred to your lender’s Standard Variable Rate (SVR) or a specified follow on rate.
It’s important you check the terms of your mortgage deal carefully, so you know what happens at the end of your deal. Take a look at your original European Standardised Information Sheet (ESIS) or Key Facts Illustration (KFI) for the details you need.
Once your tie-in period ends you may be wondering what happens next.
What happens when my mortgage product or set deal ends?
Subject to the conditions of your mortgage you’re most likely now free to take up a new deal and / or leave your existing lender. You should be aware that the SVR or follow-on rate is likely to be a higher interest rate than you were previously paying, so you may wish to act promptly in reviewing your deal.
You should also check the Early Repayment Charge (ERC) applicable to your deal and the end date of this charge, as this will state when you can redeem or switch your mortgage penalty-free. Read more about the Early Repayment Charge here.
In the case of our own borrowers, when their mortgage product is coming to an end we’ll get in touch with them before their deal expires, offering a range of follow-on products most often not available to new customers. We can then set up their new product to follow straight on from their previous one.
Am I free to move to a new lender?
Yes, once you are no longer in a tie-in period you are free to carry out a remortgage – this is, essentially, the process of swapping your existing mortgage deal for another one – either with your current lender or with a new provider entirely.
Read our guide to remortgaging here. https://www.ibs.co.uk/blog/mortgages/what-is-a-remortgage
Can I change the amount I want to borrow, or how long I need the mortgage for?
Once you are no longer subject to an ERC you can change the requirements of your loan as you wish, subject to meeting the lending criteria and affordability assessment of your lender.
For example, some borrowers may wish to change the overall term of their mortgage, either taking longer to pay off the total loan or shortening it. You should be aware of how this will affect your monthly repayments and the total interest you pay back.
You could also opt to borrow more funds, using the extra to carry out home improvements, or could choose to take a smaller loan and use your own savings to pay off some of the mortgage capital.
You can explore this through your existing lender, and if choosing to borrow additional funds you may need to speak to a mortgage consultant who will advise the options available to you.
Of course, you can also remortgage to a new lender and set out your loan requirements at time of your application.
What to do next?
If you’re not currently a borrower with us and considering remortgaging to a new provider we may be able to help. We offer remortgages up to 95% Loan To Value with a range of repayment methods available. We also have no maximum age limit so we are able to lend to older and retired borrowers, provided that the mortgage is affordable.
For more information visit our product page or get in touch with one of our Mortgage Consultants for no obligation, fee-free advice.
For existing borrowers coming to the end of your mortgage deal take a look at your options on our existing members page or give our mortgage team a call on 01473 278511.