What hoops will we have to jump through to switch mortgage?

Ellie78

Me and my OH currently have a mortgage with Halifax which we haven't changed for years. We definitely want to remortgage to get a better deal but I'm not sure whether it would be simpler to swap to a different Halifax product rather than find a new lender?

With a new lender I'm assuming we'd need a valuation/credit check etc? Even if the arrangement fees are £0 would we still have a lot of red tape to work through? We ideally want to pay off a chunk (£9k, taking the starting amount down to £40k) and also reduce the term.

Current mortgage - £49,000 Halifax, 25 years+10 months remaining, 4.24% variable

Could switch to -
Halifax 3 year fixed at 2.94%, 10 year term or
HSBC 2 year fixed at 1.64% for 10 year term

Would we be saving ourselves a lot of stress/trouble just to stay with the same lender??

getmore4less

You don't say what your LTV is but the rate suggest 60% or under.

Halifax are not good with small mortgages they penalise.
Rarely a good choice if borrowing under £250k on decent LTV.

if you do go with £40k over 10y and if we assume rates don't move.

Amount.rate.payment.interest.2y.10y
£40,000 4.24% £410 £3,123 £9,147
£40,000 2.94% £385 £2,154 £6,216
£40,000 1.64% £362 £1,195 £3,397

That £1k saving over the first 2 years should make it worth getting away from Halifax, it will cover more than a few hours work or pay for a broker to do it for you if you can't be bothered.

Unless Halifax change their policies they will always be more expensive so the potential savings are more like £3k long term.

Depending on your other plans and any concerns about rates you could look at longer term products

[Deleted User]

3 or 4 months payslips
3 or 4 months bank statements
latest month for any credit cards
ID
Mortgage Statement or account number for Halifax as we can access the data directly

Shouldnt take more than 10 minutes to download all that from online banking etc and save the pdf's.
Most brokers wont even need you to print them off

An hour of your time and then the broker does the rest.

If thats too much then stick with Halifax, otherwise speak to a broker and get them to do the hard work for you. Most lenders offer cashback which should offset any fees charged

Thrugelmir

Ellie78 wrote: »

With a new lender I'm assuming we'd need a valuation/credit check etc? Even if the arrangement fees are £0 would we still have a lot of red tape to work through?

Mortgage exit fee, legal fees and valuation fees need to be factored into the equation. Possibly a brokers fee as well. Costs do mount up.

Ellie78

Thanks everyone. Yes LTV is less than 60%. We have 50% ownership of our current house which we have a mortgage for and pay rent on the other half.
We were planning on moving fairly soon but have decided to stay a couple of extra years as my OH is thinking of a career change which may mean a drop in income for a little while. Plan is now to pay off as much of this mortgage as possible while we're here.
I've checked our current mortgage docs and there's no exit fees. I've banked with HSBC for years so that might make applying with them easier?

Ellie78

getmore4less wrote: »

Amount.rate.payment.interest.2y.10y
£40,000 4.24% £410 £3,123 £9,147
£40,000 2.94% £385 £2,154 £6,216
£40,000 1.64% £362 £1,195 £3,397

I appreciate the sums, that makes it nice and clear, thank you!

[Deleted User]

Ellie78 wrote: »

Thanks everyone. Yes LTV is less than 60%. We have 50% ownership of our current house which we have a mortgage for and pay rent on the other half.
We were planning on moving fairly soon but have decided to stay a couple of extra years as my OH is thinking of a career change which may mean a drop in income for a little while. Plan is now to pay off as much of this mortgage as possible while we're here.
I've checked our current mortgage docs and there's no exit fees. I've banked with HSBC for years so that might make applying with them easier?

You mean you have a shared ownership mortgage? You have to take the loan to value as how much you own of the bit you bought.
HSBC don't do shared ownership mortgages as fad as I know. Definitely not through brokers. Maybe direct

Ellie78

Deleted_User wrote: »

You mean you have a shared ownership mortgage? You have to take the loan to value as how much you own of the bit you bought.
HSBC don't do shared ownership mortgages as fad as I know. Definitely not through brokers. Maybe direct

Oh ok . It doesn't say anything on our documents about the mortgage being specifically shared ownership. It has a code and "new build" under Mortgage Product on the key facts document. All other documents from Halifax just say repayment mortgage.
I'll make an appointment with my local bank manager (HSBC) and see what advice they can give me. Thanks!

Thrugelmir

Ellie78 wrote: »

I've checked our current mortgage docs and there's no exit fees.

There'll be a mortgage redemption fee payable to discharge the existing mortgage.

Ellie78

Thrugelmir wrote: »

There'll be a mortgage redemption fee payable to discharge the existing mortgage.

Oh yeah, found that. It's only £50, that's not too bad.