Helping you find a better deal
We’re closed to new business and can’t offer additional borrowing or new mortgage deals, such as fixed-rate mortgages, to our customers. Because your interest rate and monthly payments could be higher with us than elsewhere, you may want to consider remortgaging to another lender to find a new deal.
If you have an interest only mortgage and you’re approaching the end of its term, you’ll need to consider your options. We can’t always offer term extensions, so you’ll need to have a plan in place to repay the mortgage balance. Remortgaging with a new lender is one way you could repay it.
If you’re 55 or over, other providers may offer ‘later-life’ lending options, such as retirement interest only and equity release mortgages which could be suitable for you.
Whatever position you’re in, there’s information on this page to help you consider your next steps.
Find a new mortgage deal
To remortgage with a new lender, we recommend you speak to an independent mortgage broker to discuss your situation and get their help to find you a new deal that better meets your needs.
You can visit the Unbiased website to find a broker. After you provide some basic details about the value of your home, how much you currently owe, your income and your age, you’ll be matched with a broker who will contact you to arrange an initial free, no-obligation chat. If you go ahead with a deal arranged by your broker you may be charged a fee for their services, so you may want to confirm this with them.
You can easily find out how much you owe by signing into Self-Serve to view your mortgage balance or get an instant redemption estimate.
Once you have found a broker, we recommend you check their details on the Financial Services Register.
If you can’t remortgage now – you can still take action
Not everyone will meet the criteria new lenders use to decide whether they’ll offer a mortgage. That can be really frustrating, especially if you’re making your current mortgage payments in full and on time. However, if you can’t get a new deal now, that doesn’t mean you can’t take steps that will improve your chances of getting a new mortgage in the future.
Make overpayments
If you can afford them, making overpayments could help to improve your position and it may be easier to remortgage in future. You may not see the benefits immediately, but it could help you in the long term.
Overpayments will reduce the balance you owe and could improve the loan to value ratio of your mortgage. This is the amount you owe compared to how much your property is worth. If the loan to value reduces, you could become eligible for better mortgage deals with more lenders in the future.
You can make additional payments every month or a one-off lump sum payment when you can. Overpayments are easy to set up or make, and you won’t be charged any fees for making them. You decide what you can afford, and you can change this amount at any time.
Reducing the amount you owe, also means you’ll pay less interest over the term of your mortgage. Even small regular amounts can make a difference. A regular overpayment of £50 or £100 a month can positively reduce the interest you pay and could shorten your mortgage term.
See how an overpayment can make a difference
In this example, a customer has a £90,000 mortgage on interest only with seven years remaining on their term. They’re paying an interest rate of 7.99% and their house is worth £115,000.
- Overpayments of just £100 a month would save them £11,207 in interest payments over the remaining term.
- At the end of the term, the balance owed will have reduced from £90,000 to £78,793 – a reduction of £11,207.
- Depending on what happens with house prices the loan to value of their mortgage will reduce with each payment. This could create more possibilities to remortgage elsewhere.
Please note – these figures assume the customer makes their normal monthly payments on time and in full over the remaining term of their mortgage, with no changes to the interest rate over the period.
Use our overpayment calculator
See for yourself – you can use our calculator to see the impact of making overpayments on your mortgage, both regular amounts or as a lump sum. Why not try some different overpayment amounts to see how much you could save in total interest and how much you’ll owe us at the end of your mortgage term.
Check your credit rating
Lenders will perform a credit check when you apply for a mortgage, and if you have a lower credit score, your application might be turned down.
There are steps you can take to improve your score.
Check your credit rating
It could be that your credit rating is stopping you from getting a new mortgage. There are many free credit check services available online which allow you to view and understand your credit rating. They also suggest ways you could improve it.
Customers with a higher credit score can often access lower interest rates, which could make borrowing cheaper and save money.
To find information about why your credit rating is important when borrowing money go to the MoneyHelper website and search for ‘credit rating.’
Improve your credit rating
Once you look into your credit score, you might want to see if you can improve it.
There are four agencies that gather credit information– Experian, Equifax, TransUnion and Crediva – so if needed you can check all four in advance of any application. Checking your score is free, and you might be able to see if there is anything you can do to improve your rating.
The MoneyHelper website has details on what you need to do.
Later life lending – if you’re 55 or over
You may have an interest-only mortgage and it may be approaching the end of its term. Getting a new interest only mortgage when you’re older can be challenging. However, there are reputable lenders willing to offer new interest only mortgages. These may be called later life or retirement interest only mortgages.
There are requirements, such as a minimum property value, minimum income and minimum loan size. The amount you may be able to borrow will be based upon an affordability assessment, looking at your income and outgoings both now and also in the future, when you may be retired. There are a few options:
A retirement interest-only mortgage is designed for older homeowners who want to continue only paying the interest on the amount they borrowed. However, some of these products do allow customers to make repayments of the capital too.
An equity release mortgage, which may also be known as a lifetime mortgage, enables older homeowners to unlock the value of their property and convert some of that value into cash. The cash allows an existing interest only mortgage to be repaid.
For either of these options the mortgage will usually be repaid when the property is sold, either after the homeowner’s death or when they move into long-term care. A number of high-street lenders are offering these products, or a specific broker can help you. These are generally available for customers who are 55 or over and require a loan-to-value ratio in the region of 50%.
- To discuss these options further you can talk to a broker, and you can visit the Unbiased website to find one.
- You can also find out more by searching for ‘homeownership in later life‘ at the MoneyHelper website.
Remortgage examples
Here are some illustrative examples to show how customers in different financial positions were able to remortgage to another lender or took action to improve their financial position.
Whilst these are not actual customer case studies, they’re useful illustrations of how some customers can benefit by moving their mortgage elsewhere.
Please note – some or all of the options illustrated here could be unsuitable or unavailable for you, as they may not provide an affordable or sustainable solution appropriate to your circumstances.
Mrs Davies was 55 with an interest only mortgage, due to end in two years. The mortgage balance was £125,000 and the property was valued at £270,000.
She was happy that she was currently paying only the interest on her mortgage but had no plan to repay the full balance in two years. Mrs Davies wanted to remain in her home because it’s close to her family and she didn’t want to sell it.
After discussing her options with our specialist team, she sought free independent mortgage advice and found a mortgage broker.
Mrs Davies couldn’t afford to switch to a repayment (capital & interest) mortgage, and she didn’t like the idea of equity release as she wanted to keep the equity in her home to leave to her family.
Mrs Davies had a reliable pension income. The broker explained that with her pension income, she qualified for a retirement interest-only mortgage.
With a new retirement interest-only mortgage Mrs Davies continues to pay only the interest on the mortgage to her new lender. However, rather than having a fixed mortgage term end date, the outstanding balance will be repaid when the property is sold. With no plans to move this will either be following her death or a move into long-term care.
Mr and Mrs Jones aged 65 & 68 had an interest only mortgage with an outstanding balance of £150,000. Their property was valued at £300,000. They were worried as their mortgage term ended in 18 months, and they didn’t have a way to repay the balance in full at that time.
The couple had savings of £50,000, but no plan to repay the other £100,000. Although they had regular pension income, they reluctantly thought they needed to sell their family home, which they had lived in for 40 years.
We sent Mr and Mrs Jones a letter suggesting they speak to a broker about their options.
Due to their age and circumstances, they couldn’t obtain a standard remortgage but did qualify for an equity release mortgage.
Their broker explained they could release a cash lump sum of up to 37% of the value of their home in cash, which was more than enough to cover the £100,000 outstanding on their original mortgage.
Equity release can work in different ways. The couple opted not to make any monthly payments towards their new mortgage. Interest is charged on the outstanding mortgage balance. The amount borrowed and the interest charged will be repaid if they decide to sell, and as and when they both die or move into long-term care.
Mr and Mrs Jones could have chosen to make monthly payments if they were concerned about maintaining the equity in their property.
Mr Osbourne and Miss Atkinson, aged 45 & 50 have a £65,000 repayment (capital & interest) mortgage with eight years remaining. Their fixed rate ended years ago, and they are now on a standard variable rate (SVR) which can change with movements in the mortgage market.
They looked for a different mortgage provider years ago but found they were unable to pass the affordability tests required to get a new mortgage.
We sent Mr Osbourne and Miss Atkinson a letter informing them they may now qualify for a mortgage with a new lender, if they contacted one of the brokers detailed in our letter.
Recent changes to mortgage affordability rules mean customers previously turned down for new deals may now qualify. A selection of lenders now apply a ‘modified affordability assessment,’ which makes it easier to secure a cheaper deal.
Mr Osbourne and Miss Atkinson contacted one of the recommended brokers who helped them successfully apply and gain approval for a new deal with another provider. They’ve managed to move to a more competitive rate, which saves them money each month.
Mr Wise was 46 and had seven years remaining on his repayment (capital & interest) mortgage.
Five years ago, financial pressure meant he found himself with mortgage and credit card arrears which affected his credit score.
Since clearing the arrears he’s been up to date with the mortgage but struggling to remortgage elsewhere due to his low credit score. Building up a good credit history can take time – often at least six months, or longer if payments have been missed in the past.
Mr Wise received a letter from us suggesting he should seek free independent advice through MoneyHelper, a government-backed service.
MoneyHelper provided information on how to improve a low credit score, and he is now taking steps to do this.
He is now working hard to repay all his credit commitments on time and stay within his allocated credit limits. Mr Wise is hoping to qualify for a cheaper deal with another lender in the next few years.
More help and information
MoneyHelper offers free, impartial guidance that’s backed by the government, to ensure that people have free access to the information and guidance they need to make effective financial decisions over their lifetime.
To find more information about the challenges of remortgaging for a new deal, go to the MoneyHelper website and search for topics such as ‘struggling to remortgage,’ or ‘negative equity.’
Other information on our website that might be useful
Useful tools & calculators
Our calculators will help you consider some of your options by illustrating the impact on your mortgage.
Redeeming your account
Find out all the information if you’re redeeming (paying off) your mortgage with us.
Please note, this page contains links to external websites. We are not responsible for the content of external websites. 0