Can I remortgage early?

06/06/2018
Remortgaging early, or even selling early, is something you'd normally consider if, for example, there's a preferential mortgage rate to change to, you want to move house or because the relationship with your joint owner has broken down and you need to sell your property. The issue though is how soon you can remortgage or sell when tied into the mortgage and the penalties that arise with the Early Repayment Charge.

As you'll have seen from our Early Repayment Charge article, mortgage lenders often charge huge penalties if you repay your mortgage before the early mortgage redemption charge period expires - in essence you are locked into your mortgage, however here are 2 ways to avoid paying the early repayment charge (plus our top tip on when best to remortgage):

    1

    Stay with the same mortgage lender

This is the most common way of not paying the early repayment charge when remortgaging or buying another property. It does however limit you to the mortgage product options the mortgage lender offers which may not be as preferential as you can get on the open market.

If you're looking to sell and buy another property then this process is often called 'porting your mortgage', but in reality your existing mortgage is paid off in full on completion of the sale and the new mortgage is registered over the new property. Be careful though; some mortgage lenders won't allow you to do this, for example:
These are examples and mortgage lenders have different terms depending on the specific mortgage product.

Halifax Bank Plc Taking your product rate to a new mortgage - In the future, you can apply for a new loan on another property. If Halifax agrees to the new loan you can take the following product(s) and any early repayment charge with you for the remainder of the product rate period(s). New loan applications are assessed in line with the lending policy at that time which may, for example, affect the repayment method, loan amount or term. The new loan will be subject to the terms and conditions in force when you make your application.

Metro Bank Plc If you move house you may be able to transfer the amount outstanding on your mortgage to another property provided you still meet our lending criteria at the time of application for the new mortgage. Fees may be charged when you transfer your mortgage. If you transfer your mortgage within the period when Early Repayment Charges are applied, you may not have to pay the Early Repayment Charges if the purchase of the new property completes within 30 days of the discharge of this mortgage and the new mortgage is for an amount equal to or more than this mortgage.

Virgin Money lf we are willing to accept a mortgage application from you in the future, we will allow you to transfer the remainder of this mortgage product to your next property. lf we allow you to transfer this mortgage product the following conditions will apply:

  • You must be selling this property and purchasing another property to let out and complete the new loan within three months of repaying this loan.
  • If you do not repay the loan on this property on the same day that you complete the loan on your next property then any applicable Early Repayment Charge set out above will be payable on that day. If you then complete the loan on your next property within three months of that day, any Early Repayment Charge paid will be refunded in full.
  • If the value of your next property is less than this property, you may not be able to transfer all of the outstanding loan balance to your new property.
  • Additional borrowing will not be available on this mortgage product.

National Westminster Bank Plc You have the possibility, during the period in which an early repayment charge is payable, to port your existing mortgage product(s) to your new property subject to terms.

Nationwide Building Society If you move house, and we are able to offer you a new loan, you can keep this mortgage product and you will not have to pay an early repayment charge if you transfer the balance and the terms of this product to the new loan for the remainder of the Benefit Period.

You can find out your mortgage lender's position on porting your mortgage to a new property in the What happens if you move house? section of your mortgage offer or you can speak to your mortgage lender and ask them.

Do you need help to remortgage early?

We have a specialist remortgage department with mortgage brokers and specialist remortgage conveyancing solicitors. For further help call us on 0207 112 5388 or you can book an appointment with our broker or get a quote for our remortgage conveyancing.

* Access to whole of the market – Available Outside of Work Hours – No need for face-to-face meeting - Terms Apply

Fixed Fee, No Sale No Fee with a 5 out of 5 rating

 

How long does it take to remortgage with a new lender?

You can read our article that explains the complete remortgage process here, however from the point of mortgage offer being released a freehold should take 2 to 3 weeks to complete and a leasehold 4 to 5 weeks. One of the key reasons a leasehold takes longer is because there are often outstanding ground rent and service charges so make sure to keep yours up to date to speed your remortgage up.


    2

    Ask to repay the mortgage early

With 12 to 6 months left to run on your mortgage you may be able to get mortgage lender's consent to repay the mortgage early. There is no guarantee mortgage lenders will allow you to do this, however some do. You need to speak to the mortgage lender's redemption/repayment department and get their written authority that they will agree to waive the early repayment charge.


How soon can you remortgage?

Realistically, if you are unable to port your mortgage, remain with the existing mortgage lender or get the lender's consent to repay your mortgage early, then you are left having to wait for your early repayment charge period to expire. That said it is advisable to start to organise your next mortgage 3 to 6 months before the end of your existing mortgage, especially if there is a preferential rate in the market.

Mortgage offers normally last for 6 months and it can take 3 to 4 weeks to get a new mortgage offer. If you are able to secure a preferential rate with a new mortgage lender, then you can look to get a mortgage offer and then wait for your early repayment charge period to expire. This places you in a good position to remortgage or buy another property using the better mortgage product.

Do you need help to remortgage early?

We have a specialist remortgage department with mortgage brokers and specialist remortgage conveyancing solicitors. For further help call us on 0207 112 5388 or you can book an appointment with our broker or get a quote for our remortgage conveyancing.

* Access to whole of the market – Available Outside of Work Hours – No need for face-to-face meeting - Terms Apply


Related News Articles

 
Mortgage Early Repayment Charge
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Remortgage Process Explained
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What is the Mortgage Process?
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