Switching bank account mortgage application?

bluedots40

Hi all, I have recently received a chunk of inheritance, most of which is going towards a house deposit. I have found a house and had a mortgage offer from West Brom and accepted this. I’ve opened a Chase saver account for the house deposit as it had a good interest rate but would like to switch bank to First Direct for the remaining amount to take advantage of the switch incentives including the saver account with them. 

My question is: would switching bank accounts have a negative impact on anything mortgage related at this stage? I’m at the stage of searches and enquiries but imagine I’ll be looking to exchange around March. I have given the mortgage company my current bank details for the direct debit and wondered if contacting them to swap these would raise any red flags. I’m buying a place for me and my 3yo on my own so don’t have any back up if things go wrong, hence trying to be extra cautious! Thank you ☺️

Rob5342

I wouldn't have thought it would have much effect but there are always offers around so for the sake of two months why not just wait? 

d6fs1l

I doubt that changing the direct debit details for the payment would matter. The bigger issue will be that switching current accounts will in many/most situations trigger a hard credit check from the new bank. Your lender may perform further credit checks or searches before you exchange or complete, at which point it may see the additional check from the new bank. How it responds to that will depend upon its policies and your own situation. It might not matter at all. But if it triggered concerns about your creditworthiness, then I think you'd regret chasing the switch incentive.

steven141

If you have had no other hard searches in the past 6-12 months then it should be fine if you are just doing one but if you do have others, I’d be more inclined to wait until the mortgage is all done.

I wouldn’t take an overdraft with the account at least until the mortgage is completed if you go down this route. 

bluedots40

Thanks all, I was mainly interested in the 7% saver with first direct for the remaining amount (though the cash incentive for switching is also nice!) but I think I’ll put it all in with the house deposit on the 5% interest Chase account and switch when I’m in the house, doesn’t sound like it’s worth it all falling through!

PRAISETHESUN

The issue is more with additional hard credit searches, rather than the account switching process itself. If you switch between existing accounts (or open new current accounts with a bank who don't do hard searches during the application, then I'd expect the impact to be minimal, if any. For FD however, they will do a hard search, which lenders will see when they do their checks. For the sake of two months I'd wait, especially as the FD offer is one of the long term ones that keeps coming back fairly frequently.