Remortgaging with same Lender...

[Beau2019]

Remortgaging/switching deal - whichever you want to call it.

Our 2 year fixed deal is up late next year and our house currently (based on 2 sales on same street of identical houses) has gone up by £15k. I am presuming by next year we will have gained approx. £20k in value.

Our financial situation has changed since taking out the mortgage - higher debt basically. My question here is, if our LTV has decreased from 95% to 80% in 2 years, does our current lender take the new valuation of our house into account or when we switch, or do they class the valuation as the purchase price 2 years previous?

I am aware we would likely get a better deal elsewhere BUT the easiest option for us would be to avoid a whole new mortgage application until we have paid more debt off. Even staying with the same lender we would save monthly switching deal anyway. We are with Leeds Building Society.

Please no suggestions on switching lenders, I just want to know how your CURRENT lender values your house when switching deal and is there an option for paying for new valuation?

following OP! I have no idea, but we are in the exact same situation, we have renovated and should be almost finished in the house by the time our deal is up and will have added value, but have borrowed to do the renovating!

Ours (Barclays) revalued based on previous sales (no visit) and we were able to get a better rate.

They probably won't ask for it to be revalued unless you're asking to borrow more money.

When I have taken a new deal with my existing lender they have just given me an idea of what the repayments will be and sent me out paperwork to sign, on the grounds that they have already assessed affordability at the time we took the mortgage out.

If you thought you could get a better interest rate with a lower loan to value you could maybe suggest it be revalued? The might be open to that.

I don’t know, sorry, but lurking because I’m curious to see what different experiences people have. Good luck getting it redone without too much hassle!

I've never remortgage with same lender but any time I have remortgaged my value has barely gone up despite houses selling for a lot more than I bought it for :/

@Beau2019 you can tell them your value has increased. If they aren't sure they will come and value it. Then you can get a better rate. I do this every time. However if you get a better LTV rate, it doesn't necessarily mean your payments will be cheaper - it depends where they set their LTV brackets and all banks are different.

We did this with Bank of Ireland last year. They had an estimated valuation of our house on their website, basically what they estimated it to have gone up in the last 2 years. We were happy with what they suggested and as we'd overpaid it moved us to a much better rate. I'd be wary of estate agents evaluations, they can often be a little high. Perhaps look at what has sold on Rightmove to see actual sold prices.

Thanks for all your input so far everyone. I've read mixed comments on remortgaging with same lender from various sites which is why I cam here for ideas...

Some have not had their value changed at all. Some have had an estimated valuation and others have been able to pay for valuation to get a lower LTV and therefore lower rates (depending on the LTV brackets of course). I just wanted some real situations from people to weigh it up. Honestly I don't think switching lender will be realistic for us financial circumstances have changed.

When we remortgaged with Nationwide, they just used their own online house price index (which you can see online) to value our house. This obviously doesn’t take into account any house improvements/extensions you may have done.

I used to get clients having issues with this. The lender will likely do an electronic valuation and it won’t necessarily be that accurate. You have to just apply and see if they downvalue the property.

@blue25

I knew Nationwide hadn’t done an actual valuation when we changed over to them, but I hadn’t realised it was quite so basic! 🤣

The ridiculous Valuation was clearly based on nothing more than the Outer Metropolitan general price rises. 🙄. Let’s just ignore the complete renovation shall we...🙄

(weirdly, done on postcode thing that’s where we are, apparently, despite being firmly South East!)

I wasn’t bothered as our LTV was good enough for their ‘top band’ but it gave me a bit of a shock at first! but as I was dealing with other life issues at the time, I just rolled my eyes and ignored it!

Oh well, it should be painless to just roll over onto another deal with them. Their rates are good enough not to go through the headache of applying with another lender (who also doesn’t freak out if you need to rent it out - which we might for a temporary job relocation)

(However, I’m open to suggestions of any other lenders that are good with ‘consent to let’ on an existing mortgage deal & with only a small fee. Moving onto BTL at the end of the fixed period)

I've just finished an extension, so the value has gone up and my mortgage company only wanted an estate agent valuation to a go with a new LTV for the new fixed rate

I had an option of valuation for £60 and they adjusted the rate accordingly after.

Each lender follows their own rules.

If you do not change your LTV (e.g. Borrow more) re-evaluations tend to not take place... Similar with affordability checks.

Most are done using RICS so it's automated and without a visit.

Remaining with the same lender will see a lower benefit than moving lenders.

NB: whilst your property value has changed, your LTV hasn't. Its based on the purchaseat the time, borrowing and value etc.. Until you change your product or remortgage the new value doesn't have significance.

I had nothing to do apart from an email to my broker, he dealt with the lender, they did their stuff internally and I had to 'sign' an online form and that was it.

I wasn't asked for any personal info.

(same lender, new deal, no extra borrowing)

Remaining with the same lender will see a lower benefit than moving lenders.

That depends what they are offering and how much your mortgage is. On paper I could maybe have got an interest rate elsewhere that was maybe 0.1% lower than what my current lender was offering. But my mortgage is fairly small so it would only have made a few pounds difference to the repayments and on balance I was happy to pay an extra £4 a month to save the hassle of having to put together copies of bank statements, outgoings, payslips and have someone come to do a valuation on my house.

@BlueP NB: whilst your property value has changed, your LTV hasn't. Its based on the purchaseat the time, borrowing and value etc.. Until you change your product or remortgage the new value doesn't have significance.

How hasn't it? My interpretation is that if they ever needed to repossess my property, the sale of my house will be higher therefore my LTV will be less as say I only owe 150k on the mortgage and my house sells for 200k?? So surely if my house has gone up in value, I am of a lower risk as my LTV has decreased therefore potentially accessing lower interest rates?

I don't want any info as mentioned on switching lender ( I well aware of the benefits). I purely want to know peoples' experiences with the LTV when they stayed with the SAME lender and the the value of their property had gone up at the end of their fixed deal. Not necessarily about them coming to do a valuation, just what happens in the process when you switch deal with same lender in regards to the value of your house. Basically do they stick to the same value at time of purchase or do they review it.

When I renewed my fixed term - remaining with lender, same amount, no extra borrowing...

Other than a new rate on my existing borrowing, with a new fixed period. Nothing changed, no ltv diff as its a continuation only.

Of course mathematically speaking, my LTV differs (as it would at any point of time if reviewed) but my mortgage didn't change.

To realise your increase in value you have to borrow more, or LTV doesn't play into it.

Loan To Value (borrowed amount against cost in time) change in value is your equity rising. Nothing to do with mortgage unless a new product or lender.

Hope I make sense?

You could always see what your lender has on offer and then address it. If eg you need to have a ltv of less than 60% to get a better interest rate and you think that by the end of your fixed term you'll have a ltv of 70% then it won't matter. If having a ltv of 70% would get you a better interest rate but under your old valuation you have a ltv of 80% you could always ask them if they would be willing to revalue the house? Best case scenario they base it on recent sales and RICS calculations and it costs you nothing. Or they might want a drive by valuation and they charge you £100. Or they might just say 'no, we don't do that'. But one way or another you have nothing to lose. If you don't ask, you don't get.

If you renew your fixed term with current lender - no change is made to the mortgage and little to no review.

On the above basis your LTV, value increase, wages, debt etc... Has nothing to do with it...

Generally speaking, you cannot change anything! You renew existing.

You gain: possibly a better value, safeguard against tracker mortgages etc.. Nothing more.

To support changes in life a mortgage allowing over /under payment should be sourced.. I.e I can overpay 10%, I can skip payments, I can temporarily reduce monthly payment all without fees or major hurdles.

OP - the only advice I offer - speak to your lender! No one can tell you didley squat, due to personal circumstances etc..

I am stuck with the same lender (irrelevant as to why ) I just move from one fixed rate to another with no problems. I have never had my house revalued.

Remaining with the same lender will see a lower benefit than moving lenders

This wasn't the case for us the first time we came to the end of our fix but was the case 2nd time round as we wanted to borrow more.

Our first mortgage was with Nationwide where we checked their retention deals. We also checked their house pricing index as they use this to value your house. Ours had had gone up by 30% in the four years we had it but so had the whole region in our SE corner. Their value was probably too high for our house as we are in ex-council but are surrounded by bigger non-council houses which brought the value up on average. We then asked a mortgage broker (L&C) to see what else was out there on the open market. We also told him what NW were offering us to stay so he had a threshold to beat. He could not find a better deal so we stayed with NW. Part of this NW retention also allowed us to switch 3 months earlier which was great for us as we were switching from a very high interest rate to a lower one so saving us about £1k in interest over those 3 months. The switch was very easy as weren't changing anything apart from the product. We did it online and took only about 5 minutes to do.

However, the 2nd time round, we were like you. Our financial situation had changed with a baby and one of us going part time yet we also wanted to borrow more to do work to the house. We checked NW's affordability calculator and knew that we wouldn't be able to get the amount we wanted. We went back to L&C and they found a lender whose affordability criteria we would pass so we left NW. The new lender also used some sort of index to value our house which showed that it increased in value

@pumpkinpie01 so every time you have switched deal, the 'value' of your house remains the same as what your purchase price was when you first took out the mortgage?

I have never been asked. I look online first , see what offers they have then ring them up ( they will have written to me about 2 months prior anyway ) and choose one without a booking fee and get it processed. Luckily my mortgage lender is always very competitive and I'm not being ripped off by being stuck with them . ( I know this as I do my research )

Will 20k actually change tour ltv to a different band? Not worth the hassle if not. We hare with hsbc and they have been good at doing this automatically for us.