Mortgage lenders may have to start allowing customers to switch provider within the space of seven working days, under government plans announced today.
The government has launched a consultation to see if the process for swapping mortgage providers could emulate the seven-day bank account switching system.
The proposed measures are part of the Digital Economy Bill, in which the government has outlined plans to speed up the switching process for mobile phone and broadband customers too.
What is meant by ‘switching a mortgage’?
The process of switching from one mortgage deal to another is known as remortgaging.
Homeowners looking to remortgage generally fall into two categories – those looking to switch providers for a better rate when their introductory deal ends, and those looking to borrow extra money to fund large expenses such as home improvements or the purchase of a more expensive home.
- If you’re hoping to remortgage, you can check out the Which? Mortgage Advisers remortgaging guide or give them a call for a free, impartial consultation on 0808 252 7987.
Mortgage switching: how the proposals would work
While the government plans to speed up the process of changing providers, the proposals don’t include a full overhaul of the remortgaging process.
The seven-day switching period would begin once a new lender agrees to offer you a mortgage. This means it would not include the time when the lender is carrying out affordability checks – a process that can take a number of weeks.
Instead, the plans are mainly designed to stop your existing provider dragging its feet once your new lender has notified them of your intention to switch.
As with the current system for switching your bank account, you’d only need to deal with your new lender.
Find out more: how to get good mortgage advice – check out our two-minute video on choosing the best mortgage broker
Remortgaging: how you can switch your mortgage now
If you’re thinking of remortgaging, we’d advise speaking to an independent, whole-of-market broker who can analyse all of the available deals on the market to find the right fit for you.
A mortgage broker may also take some of the hassle out of the process, managing the application from start to finish and dealing with lenders and potentially solicitors on your behalf.
For advice about switching your mortgage and to find out if you could be getting a better rate elsewhere, you can speak to an impartial, whole of market broker such as Which? Mortgage Advisers on 0808 252 7987.