Remotgage - Cancelling an AIP for better rates with existing lender

kaleel86

Hi, 

So on 1st of August I can switch to a new rate  on my existing mortgage with my current lender. At the moment the rates that I can see from them are better but not available. I'm wondering if it's a good idea to go through the process of applying for a new mortgage via a broker, get an AIP, and then sit on it for a few weeks until I can check whether my existing lender ups the rates. If they have upped them and the new lender is better, crack on with the new lender, but if my existing rates are still better, cancel the application and just switch with my existing lender. 

Any problems with this plan? will it affect me in any negative manner? have i missed something obvious? 

Thanks in advance!

PawelK

Hi. I've done exactly that and when it was just under six months to my fix expiry, I used free broker who found me the best rate I secured right now. Month later my existing lender allowed me to start considering product switch with them but by that time their rate was already worse than what I secured. So, my advice is don't wait and do it asap. It doesn't cost anything and you can walk away later, if your existing lender offers better rate or, in a very unlikely event, they'll start falling. 😉

kingstreet

An AIP doesn't secure a rate with most lenders.

Usually, submission of a full application is required.

kaleel86

kingstreet said:

An AIP doesn't secure a rate with most lenders.

Usually, submission of a full application is required.

thanks.

so I guess I have the same question but replacing 'AIP' with 'a full application being submitted and accepted by the lender' (but not signed/completed). If I get to the point where the lender has said yes  application successful, can I then cancel if I find my current lender has a better offer for me? or would there be a consequence to that?

kaleel86

PawelK said:

Hi. I've done exactly that and when it was just under six months to my fix expiry, I used free broker who found me the best rate I secured right now. Month later my existing lender allowed me to start considering product switch with them but by that time their rate was already worse than what I secured. So, my advice is don't wait and do it asap. It doesn't cost anything and you can walk away later, if your existing lender offers better rate or, in a very unlikely event, they'll start falling. 😉

So you did a full application and after they accepted, you waited?

PawelK

I was accepted, yes and was already sent an offer and right now sending all docs to the new lender's solicitors. 

kingstreet

Once you apply and a formal mortgage offer is issued, you are committed only to the extent of any fees you have paid.

You can cancel the application upto completion.

kaleel86

kingstreet said:

Once you apply and a formal mortgage offer is issued, you are committed only to the extent of any fees you have paid.

You can cancel the application upto completion.

Thank you, it's a fee free broker so that shouldn't be an issue.