AIBU to be totally panicked by our remortgage?

[ploddingalong2023]

We haven’t remortgaged before. Got our first mortgage 2 years ago. We are due for a remortgage in August, fully accepted that it is going to go up with the current climate but my worry is our salary change.

since our original mortgage, no partners salary has remained the same but mine has reduced slightly as I have dropped a day to spend more time with our little one. (Something we had always planned after I returned from Mat leave)

Our salaries now don’t combine to the 4/4.5 x that a lot of mortgages rely on.

however, we manage every month. (It’s tight but we made that choice when we bought) but as I say we manage and have never ever missed a payment for anything, mortgage included.

is remortgaging easier than getting the original mortgage? Will other lenders, if they offer a better rate, offer even though we are under the 4 x rate? (Marginally)

will they take into consideration 2 years of paying a mortgage with no misses?

Have you looked into a product switch with your current lender? No affordability checks will be needed and it's very fast and straightforward
I'm with Nationwide and I can do it online. Takes about five mins

There are fewer checks if you stay with your existing lender - called a product transfer - than if you seek a remortgage with a new lender.

Are you going to change anything else - the amount or the term?

Money Saving Expert has guides to both product transfer and remortgage.

Just stay with current lender, no checks then. hopefully they can offer you a reasonable deal. Or you could apply/speak to a whole of market broker first. Then stick with your current lender only if necessary

Stay with current lender. They don’t re-do the affordability checks- at least ours didn’t.

You don't have to do anything. Just stay as you are and they'll put you on the Standard Variable Rate if they don't hear from you.

But that would be very expensive - SVR is much higher than a fixed rate. Obviously sometimes it has to be done, but this would be a last resort usually.

Which will be nearly 9%!!!!

You absolutely DO need to do something, but staying with your current lender on a new deal is much easier, as others have said.

This is the craziest advice I’ve heard in a long time

Just stay with your current lender, no checks needed. Been in a similar position before.

You're unlikely to get a mortgage with a different lender, by the sounds of it. You'll fail affordability, so you won't get to the point where they'd take into account what you pay now and your payment record.

If you stay with your current lender, you can usually choose your own product and then tick a box to say you've made your own decision and haven't taken advice from the bank, so they won't be responsible if the product isn't the best fit - and if you agree to that, they won't do affordability checks.

Don't go onto SVR.

What would happen if you did want to change the term or loan amount and you stick with the same lender ? Do you have to go through a whole new application ?

Stay with current lender. I’m with Natuonwide. I picked the terms I wanted and that was it. I also got £100 for staying with them.

Not the id checks but yes the affordability checks. Also they may have to revalue.

As others have said, stay with current lender. Your current lender will probably send you out an email and show you the rates they can offer. They all offer the same rates more or less so don’t worry about it. My credit rating is crap just now and I recently moved to a different deal with my current lender, no checks done at all.

I don't really understand, if your mortgage is going to go up, why wouldn't even your current lender redo affordability checks?

Stay with current lender but switch to whatever is the best fixed rate % product they offer.

Don't stay on standard variable rate that will be expensive.

If that happened, lots of people would be forced out of their homes after a few years when a mortgage is a 25 year contract. Once you have the mortgage based on the people who originally applied for it, they will not take it away if you stay with the lender. If you were to split up, it's a different ball game.

My lender just had fewclicks product switch. I did aak for revaluation asit increased that time, but it was easy peasy. Yours will most likely have the same.

If you go with a new lender then yes you will have to meet the 4x income to get a mortgage offer. It doesn’t matter to them at all that you’ve paid for 2 years it’s a simple calculation for them and if your income doesn’t meet it then they won’t offer. Your only option really is to stay with your current lender and just choose a new product.

First time I remortgaged I had been made redundant the month before.

I just accepted a new fixed deal with my current lender no problem

Just stay with your current lender… we have just done the same. It took our broker about 10 minutes. My DH is on a commission based job and it’s been a tough year, we’d have passed affordability but our rate would have been higher. We wanted to add my name to the mortgage but they would have run additional checks for that. We got a 2 year fix so we’ll just wait until then to do it. Hopefully rates have settled a bit more then as well.

In this climate, switch products with your current lender. The majority of the big lenders have very similar rates anyway, and if you change lender there may be valuation fees, additional product fees, legal fees etc to consider.

It's a very tough climate at the moment. Hopefully it'll change soon. We were similar to you, bought the house a few years ago as FTBs, had a baby, mat leave, went PT and added in nursery fees. Then had to remortgage. Luckily, although it went up, we were better off staying with the current lender.

Some will let you see whats available around 6 months in advance and secure a rate without committing to it. If you do that, you can leave the agreement sitting while keeping an eye on the market. Might give you some comfort.

Thanks lightswerve, I'm also curious if you wanted to reduce the loan at the time of remortgage say pay a down payment to the overall loan to make it 5-10percent less while staying with the same lender would they also do the reaffordibility 🤔

I think I’d speak to brokers to understand what would be available to you.

Your mortgage will likely go up which if you’re worried about I’d look at extending the term. This is what we plan to do while we have young kids and then once childcare costs go etc. reducing the term to just give us some breathing space.

@Mummy2mybear no they don’t - only if you were adding additional borrowing to your mortgage or wanting to increase number of years