Does Switching Lenders Involve Checks?

Genex

Hi, my fixed rate package is up in October and I'm looking to renew it, my current lender is offering a cheaper package than my current package but other lenders have better packages I believe.

The trouble is I'm currently between jobs and VERY low on money (basically 0 right now). If I stay with my current lender, there are no checks, they just update the package with the new payment figures. If I switch lenders, do I have fees and have to go through bank, income and employment checks etc?

My current rate is 2 years fixed, 2.19% (4.99% after) at £560pcm

They are offering 2 year and a 3 year both at 1.99% (3% after, no fees), which would both be £545pcm

And they have both a 5 year AND a 7 year fixed on what I'm on now, 2.19% (5% after), £560pcm

The mortgage has 25 years remaining.

I "could" potentially move within 5-7 years - does this negativly affect a fixed term in anyway?

TIA

MovingForwards

With no income you won't pass the affordability checks to remortgage with someone.

Hopefully you will find employment by October, settle into your job and then look to remortgage.

As it stands today you are better staying with your current mortgage company and doing a rate change online where they don't check your finances.

Genex

MovingForwards wrote: »

With no income you won't pass the affordability checks to remortgage with someone.

Hopefully you will find employment by October, settle into your job and then look to remortgage.

As it stands today you are better staying with your current mortgage company and doing a rate change online where they don't check your finances.

Thanks, that was what I was really after.

I've been told that rates are at an all time low, and certainly have gone down year on year since I've had my mortgage. In your opinion - or if you have somewhere to read - how stable are things and what do you envisage for rates in the future?

I've had 2x 2 year fixed packages so far and thinking if rates are so low, and last year the base rate went up, maybe a 3 year fixes is the best idea?

Genex

Also, when rates go up, does that mean PCM goes up as well or just that interest takes a higher percentage of your PCM payment?

Sorry, I know nothing about mortgages, another question - when people speak of interest rates, are they always referring to the out of package (SVR is it?) So if the Bank of England said rates are going up to 10%, would you still get lower rate packages for fixed terms? Or would they go up but in line with the base, so 10% usual but 2 years fixed at 4% for example

MovingForwards

No one can say how mortgage rates will go in the future, it's pot luck but if you want to have consistency with your payments and know how much you will be paying for a while then go for a fix!

No point thinking about what ifs, think about what you can do.

The brokers will be along after they have eaten / put kids to bed etc and say if there are any other options.

MovingForwards

When interest goes up, if you are not in a fixed rate then your payments go up by however much your mortgage company raises their interest rates.

SVR = standard variable rate ie not a fixed rate.
So it could be 1% + over the bank of England base rate.

If the BoE put interest rates up by 10% I doubt very much you could get a fix for 4%, but others who have been through recession and high interest rates will be able to say what happened.

Have a read through loads of the posts on the mortgage board and you will pick a few bits of very useful information.

MovingForwards

https://www.nationwide.co.uk/products/mortgages/our-mortgages/mortgage-calculators/mortgage-payments

Have a mess around with this and you can see how the payments change.

Genex

MovingForwards wrote: »

No one can say how mortgage rates will go in the future

Oh of course, but people make educated projections all the time. As I'm reading, we're in a 300 year low down from around 17% in the 70s to 0.5% now.... that is up 0.25% from last year/2017... if this were the stock exchange that would be indicative of an in coming upward trend.

I appreciate no one knows for sure, but people into economics and financing will have a fairly good idea :P

MovingForwards

The 80's had high interest rates as that's when everything went belly up, loads of repo's, share prices plummeted and vast job losses.

Typhoon2000

Genex wrote: »

Oh of course, but people make educated projections all the time. As I'm reading, we're in a 300 year low down from around 17% in the 70s to 0.5% now.... that is up 0.25% from last year/2017... if this were the stock exchange that would be indicative of an in coming upward trend.

I appreciate no one knows for sure, but people into economics and financing will have a fairly good idea :P

That would be base rates. Mortgage rates have fallen despite base rate rise.

Genex

Typhoon2000 wrote: »

That would be base rates. Mortgage rates have fallen despite base rate rise.

But would you expect/imagine them to drop below 1.99%? / what they are now

Looking at the stats, 2, 3 and 5 yr fixed are going up now, only 10yr fixed is falling