If you’ve had your mortgage for some time, your introductory deal will probably have expired.
This means you could now be paying more for your mortgage than you once were, so you might be thinking about remortgaging to save.
However, you might find that you have some difficulty switching to a new mortgage deal, as one in seven homeowners says they have had problems when trying to port their mortgage, according to new stats. This means they could be ‘mortgage prisoners’ – unable to make the most of the best deals on the market and stuck at their current mortgage rate.
MMR and remortgaging
The reason why some mortgage holders may find it harder to remortgage is because of the Mortgage Market Review, which was introduced in 2014. This tightened up the affordability checks that lenders have to carry out before they decide whether you’re able to borrow or not. Lenders will have to check your outgoings to see what you’re spending every month and they’ll use this to make a decision whether to grant you a mortgage or not.
Ultimately, these checks are a good thing, as it means that you’ll be less likely to take on a mortgage that you can’t afford to repay. However, if you have a lot of expenses every month, it could mean that you’ll find it difficult to get a mortgage.
The MMR can affect you if you already have a mortgage as well, if you decide to remortgage to a cheaper deal. After your introductory discount or fixed offer has ended, you’ll probably be moved onto your lender’s Standard Variable Rate (SVR). This is rarely the cheapest rate, meaning you might be considering remortgaging.
However, if your circumstances have changed since you took out your mortgage – you’ve got more expenses or loan repayments – this could mean that you’ll find it harder to switch to a better deal. If you’re looking at the best offers from your lender, their affordability checks could mean you might not be able to port your mortgage, so you’ll be stuck on the costly SVR.
What you can do
You don’t need to worry if you’ve become a mortgage prisoner in this way – you still might be able to switch to a cheaper deal. It’s worth taking a look at some of the other lenders on the high street, as they may have mortgages that are more suitable for you and more likely to accept you.
You could also consider using a mortgage broker – like Ocean – to help you find a remortgage deal. We’ll be able to search our panel of lenders to look for a deal that’s suitable for your persona situation. You could even find a deal you wouldn’t get on the high street, as some deals are only available through brokers.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.