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Original poster

Just curious - what happens if you're unemployed and need to remortgage?

29 replies

Sunnydreams29 · 03/02/2025 23:12

I bought my first house in Jan 2024 and fixed for 2 years. I've always worked full time but I recently left my job due to stress and awful management. I have a few interviews lined up over the coming weeks (luckily I work in an industry where there's always job openings) so I'm confident that I won't be out of work for very long. I have 9 months worth of savings as a back up too.

It will be a while before I need to remortgage, but it got me thinking, how does it work if you happen to be unemployed when you need to renew your mortgage?

Understandably lenders assess people's finances and complete checks before they buy the property, and I know it's near on impossible to get a mortgage if you're unemployed. But what happens after you've bought the property? If you've always paid your mortgage with no issues but just happen to be unemployed at that time I'm not sure how they would assess the application. I've read that savings don't count.

Any thoughts? Or is there anyone that has been through this situation before and how did it work out?

OP posts:
Movinghouseatlast · 03/02/2025 23:14

You just have to stay with the same lender and take another fix with them. That's what we did when my partner was unemployed.

AyrnotAir · 03/02/2025 23:14

You couldn't remortgage, your fixed rate would just end.

fashionqueen0123 · 03/02/2025 23:14

Just stay with the same lender then you don’t need to show anything. Usually just click a new deal online

Undrugged · 03/02/2025 23:19

You go on to your lender’s standard variable rate. No chance of a remortgage or a fix unless you’re long term self employed and peaks and troughs are normal.

onwards2025 · 03/02/2025 23:19

You don't have to remortgage, it is just the interest rate for the time being that is on a fixed time period, the mortgage contract with the lender is for however long you've taken the mortgage out for and runs until then, it changes to being on the banks standard rate once any fixed period for an interest rate comes to an end, that's all.

You can simply stay put, you do not have to do anything, no obligation to remortgage or take a new interest rate deal.

The reason people do is that quite often you can get a better rate but not always.

In your scenario, if you're not in an employment situation to apply for a new rate then you will just need to tolerate your lenders standard rate once your rate deal comes to an end until the point you are in a position to apply for a new rate

Twiglets1 · 04/02/2025 05:45

Get another fixed rate with the same lender and you can normally organise it with a few clicks online & no financial checks as @fashionqueen0123 said.

MyUmberSeal · 04/02/2025 05:47

As other have said. You can fix in to a new deal with the same lender. They don’t do the same checks as a brand new lender. It’s quite a simple process.

Unexpecteddrivinginstructor · 04/02/2025 06:14

Yes we found that our existing lender's rates were fairly competitive once you factor in that you don't need to pay conveyancing fees, no affordability checks. The difference each month was fairly negligible (in the later part of the mortgage so mainly paying equity rather than interest). We didn't change lender because currently paying out for university fees and didn't want the hassle of affordability checks. In fact when I crunched the numbers found it was cheaper to go for one with no fee, which sounds counterintuitive. We were able to fix through the online portal up to six months before but switch to a different offer up to two weeks before (unfortunately the rates didn't go down but we could have if they had).

Hope you find another, happier job soon.

SecretSoul · 04/02/2025 06:35

Depends on the lender I guess.

I wasn’t unemployed but went from high-paying employed role to low-paying self-employment.

Our mortgage lender wouldn’t approve us for a new fixed deal because I didn’t meet their financial checks, despite paying the mortgage on time every month.

We were stuck on the standard variable rate because they deemed that I didn’t pass the affordability checks for a new fixed rate deal. So I had to stay on their standard variable which was more expensive while apparently not being able to afford the cheaper fixed rate…..the irony wasn’t lost on me 🤦🏻‍♀️

So if your lender is like mine you won’t be able to re-fix your rate if you’re unemployed. But others seem to have had more sympathetic lenders so 🤷‍♀️

DarlingSophieImHome · 04/02/2025 06:44

We got our normal yearly mortgage statement and also a letter stating our fixed rate would be ending in 6 months and did we want to look online at their products and we could lock it in now to start at the end of the 6 months, when the term ended.

We looked online, chose a product, and a couple of clicks and done. That was Nationwide. We have been with them 10 years doing that. I don't believe we have ever been through another affordability check with them. We do of course compare their deal to others but theirs were favourable and so easy to do.

Twiglets1 · 04/02/2025 06:49

DarlingSophieImHome · 04/02/2025 06:44

We got our normal yearly mortgage statement and also a letter stating our fixed rate would be ending in 6 months and did we want to look online at their products and we could lock it in now to start at the end of the 6 months, when the term ended.

We looked online, chose a product, and a couple of clicks and done. That was Nationwide. We have been with them 10 years doing that. I don't believe we have ever been through another affordability check with them. We do of course compare their deal to others but theirs were favourable and so easy to do.

Had the same experience a few years back and we were also with Nationwide.

ItWasTheBestOfTimes · 04/02/2025 06:50

I’ve switched product the last 3 times with existing lender without going through affordability checks or a full remortgage. Like PP once I took into account the costs of remortgaging with a different provider it worked out to be a negligible difference in repayments. We earn far more than what we did when we first bought the house 10 years ago, I’m the lower earner but make more than what we did combined at the time, but because DH is now self employed going through a full application wouldn’t be as straightforward as last time.

TwirlyPineapple · 04/02/2025 06:51

We just did a product transfer with our current lender. No need to go on the variable rate, we did another 5 year fix.

DaringlyDizzy · 04/02/2025 07:05

I used Halifax and when it came to remortgage just clicked a few buttons to renew with them again

hjfoau · 04/02/2025 07:49

I'm with Nationwide and you just log on and choose a new rate, no checks happen whatsoever. Takes seconds.

greenbirds · 04/02/2025 07:58

Agree with others. Select a new deal online with your existing lender. No affordability checks done.

We have been doing this on repeat for about 10 years after my husband moved to a lower paying job. We can still afford the mortgage, although wouldn't pass a lender's affordability check, so it works well for us.

Cattreesea · 04/02/2025 08:09

As people have already said, stay with the same lender and get a new fixed rate with them online. The majority don't do/need new affordability checks.

Best of luck with your job search!

myotherusernamesarebetter · 04/02/2025 08:13

AyrnotAir · 03/02/2025 23:14

You couldn't remortgage, your fixed rate would just end.

Untrue. You can get a new product with the same lender. You just can’t move lenders.

LadyFriend · 04/02/2025 08:15

If you are with a standard high street lender you should be able to choose a new fixed rate with them on ‘execution only’. This means you choose the next product yourself from their website. If you want them to give you ‘advice’ and recommend a product to you then they will have to assess your income. Really, it’s very simple to choose your own product now.

People on SVR - have you asked if you can do ‘execution only’? It’s amazing how many people aren’t aware of this option.

SecretSoul · 04/02/2025 08:31

myotherusernamesarebetter · 04/02/2025 08:13

Untrue. You can get a new product with the same lender. You just can’t move lenders.

Edited
Show quote history

Not with all lenders. My lender did affordability checks if you wanted a new deal, so I wasn’t eligible as I’d changed job. Hopefully my lender is the minority though!

AnSolas · 04/02/2025 08:33

'Legally speaking' you have taken out a long term contract with a clause that says you pay back all the money and pay interest as outlined in the interest clause
The contract then splits the interest into the known term and the remaining.
First bit says first X years are fixed at Y rate
The next bit will say subject to the banks agreement the rest of the term can be agreed at different rate for different periods of time
But if you and the bank cant agree the bank get to pick the rate.

Being unemployed would not be a breach of contract but the bank could exclude you from some of their deals.

warmheartcoldfeet · 04/02/2025 08:39

Just don't switch lenders and you can carry on paying the mortgage albeit at the higher rate since your current fix will have ended.

No stress, just possibly a slightly higher cost. Read your original offer letter and it will state the percentage rate once your current fix ends.

crumpet · 04/02/2025 08:39

if you try to remortgage with the same lender (instead of just automatically moving to their standard variable rate), check the position - they may not do an affordability check, but somewhere in the small print as there could something along the lines of “has anything significantly changed since last time”/“you are confirming that nothing has changed since last time”

RatedDoingMagic · 04/02/2025 08:44

As pp say it's fine if you stick with the same lender and don't want to borrow more. You simply swap to a new deal. It's easy. The first time I needed to rearrange, 2 years after buying for the first time, I procrastinated for ages as I thought it would be complicated but it really wasn't. They sent me a sheet of various available rates and terms, I picked the most suitable one and signed a paper. Done.

Twiglets1 · 04/02/2025 08:55

crumpet · 04/02/2025 08:39

if you try to remortgage with the same lender (instead of just automatically moving to their standard variable rate), check the position - they may not do an affordability check, but somewhere in the small print as there could something along the lines of “has anything significantly changed since last time”/“you are confirming that nothing has changed since last time”

Edited

I wouldn’t draw their attention to the changes, seeing as the result would be the bank putting you on a higher rate. Dishonest yes, but banks are hardly known for their high morals are they. It’s a small lie in my book and not one I would lose any sleep over.

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