Can You Switch Mortgage Lenders Mid-Application?

You’re halfway through your mortgage application when you realise there might be a better deal out there. Suddenly, doubts creep in and the question reverberates in your mind: Can you switch mortgage lenders mid-application?

The short answer is yes. Whether it’s a delay in processing, an unexpected fee, or you’ve simply found a better deal elsewhere, many homebuyers do choose to switch lenders during their application.

On the surface, switching mortgage lenders might sound very complicated, however, it’s often much easier than people realise – especially if you’ve not submitted an application yet. Simply, moving to a different lender could save you both time and money, but only if handled correctly.

In this article, we break down how switching mortgage lenders works, what to consider before making the move, and how to avoid any costly mistakes. Let’s begin.

Why Do Homebuyers Switch Mortgage Lenders Midway?

There are several reasons why you might choose to switch mortgage lenders during the application process. Much like changing your mind about a purchase while walking to the checkout counter, you might end up spotting a better interest rate, change your mind on your financial plans for the future, or want to explore a different plan of attack.

Making the switch can often be the smart financial decision that can lead to better deals, saving you money and reducing stress in the long term.

Here are the top reasons why homebuyers switch mortgage lenders during their application:

1. To Find a Better Mortgage Deal

The standout reason for switching is naturally to find a better mortgage deal. While the term ‘better’ is subjective to each case and individual – this could be in the form of a lower interest rate, reduced product fees, or even more flexible terms – finding a mortgage that better suits your needs can help massively in the long term.

Additionally, it’s worth noting that even a slight reduction in interest can end up contributing to a  significant saving over the entire life of your mortgage.

2. Poor Service from Your Current Lender

Customer service plays a big role in any financial decision – especially when it comes to potentially one of the biggest financial commitments of your life.

If you’re finding that your current lender is slow to respond, difficult to reach, or unclear in their communication, this can understandably lead to a dissatisfied and frustrated mindset. In such situations, switching mortgage lenders may help you regain control, reduce unnecessary stress, and put you on track with a lender who better suits your needs and timeline.

3. Unexpected Costs or Mortgage Lender Fees

If you’re not working with a trusted and regulated mortgage broker – such as Boon Brokers – some homebuyers may encounter unexpected mortgage lender fees during the application process, including high valuation charges, legal fees, or administrative costs.

Should these additional costs make the mortgage less affordable or appealing, then exploring alternative lenders could provide better value overall.

4. The Lender Can’t Meet Your Timeline

With any mortgage application and property purchase, timing is crucial. If you find that your mortgage application is delayed due to slow processing or internal backlogs, you may risk missing out on your dream house purchase altogether.

As such, when timelines are tight, finding a reliable and efficient lender may help you complete the process at a quicker pace.

What Should I Consider Before Changing Mortgage Lenders?

Changing lenders isn’t always straightforward and depending on your specific situation, can involve additional costs, potential delays, and administrative steps.

Taking the time to understand and weigh up these considerations will help you make an informed choice, avoiding any surprises along the way. As such, before deciding to switch mortgage lenders mid-application, here’s what you need to know:

The Cost of Switching Mortgage Lenders

Depending on how far you have progressed through your application, changing lenders mid-application may involve new product fees, valuation fees, or even legal costs:

• Product or Arrangement Fees: These are often paid upfront to secure a specific mortgage deal. If you’ve already paid this to your original lender, you may not be able to secure a refund, even if you decide not to proceed with the product.
• Valuation Fees: Most lenders require their own property valuation, even if you’ve already completed an independent valuation. As a result, this may mean that you need to pay for a second valuation should you choose to switch lenders.
• Legal Costs: If you’re in the latter stages of the application and your solicitor has already begun working based on the original lender’s requirements, switching may result in extra legal work or duplicated efforts. Subsequently, this can increase your overall conveyancing bill.
• Broker Fees: If you’re working with a mortgage broker who chooses to charge an hourly fee – rather than a fee-free broker like Boon Brokers – then switching may also increase the required time and your total costs.

Additionally, it is important to consider whether switching lenders now will delay your property transaction. If you’re on a tight timeline, for example, nearing exchange or completion, even a short delay could result in financial penalties or complications with the seller.

In short: It’s essential to compare the total cost of staying with your current lender versus the reasons for moving. If you’re motivated by financial savings, the long-term benefit of a lower interest rate may outweigh the initial costs of switching. However, in other cases, the costs could cancel out any potential benefits.

Before making a final decision, it’s worth checking with your current lender to see if any fees you’ve already paid are refundable, and what further costs you might incur if you stay with them.

To ensure that you’re making the most financially smart choice, working with a trusted, fee-free broker like Boon Brokers can help you assess the true cost of switching. Additionally, our mortgage experts can help identify and compare alternative deals with whole-of-market access in order to see if making the move to an alternative mortgage product is worthwhile.

Is There a Penalty for Switching Mortgage Lenders?

Whether you’ll face a penalty for switching mortgage lenders will wholly depend on what stage you are in the mortgage process.

In the scenario that you’re mid-way through a new mortgage application – and haven’t signed the final mortgage offer – there usually won’t be any formal penalties for switching lenders. However, as we’ve highlighted above, you may still lose any non-refundable fees already paid, such as valuation or booking fees – so it’s important to check the terms carefully.

On the other hand, if you’ve already completed a mortgage application and are looking to switch lenders, this would be called a remortgage. Consequently, remortgaging during a fixed-rate deal, it’s a different story.

Most lenders will apply early repayment charges (ERCs) if you leave your deal before the agreed end date. These penalties can be substantial and may outweigh any potential savings from switching early.

In either case, whether you’re switching lenders mid-application or remortgaging during a fixed-term deal, it’s important to seek expert advice. A fee-free broker like Boon Brokers can help you understand the full financial implications and make the best decision for your situation.

Should I Switch Mortgage Lenders Based on Timing?

It’s important to note that switching lenders mid-application may extend your timeline by several weeks – particularly if a new valuation or solicitor process is required.

If you’re working to tight deadlines, such as a fixed exchange date or a property chain, any delay could risk jeopardising your purchase or even lead to financial penalties. Therefore, it’s essential to carefully weigh the potential savings or benefits of switching against the possibility of a longer, more complex process.

How Do I Switch Mortgage Lenders?

While we’ve covered key considerations, if you’ve decided that switching mortgage lenders is the right choice for you, here’s how to navigate the process step by step:

Switching mortgage lenders mid-application can feel complex, but working with a trusted, fee-free mortgage broker like Boon Brokers makes the process much smoother.

Our dedicated mortgage expert will help guide you through each step, from comparing mortgage illustrations to managing valuations and paperwork. By leveraging our whole-of-market access and industry knowledge, we help you find the best deal that is tailored to your financial needs, saving you time, money, and stress – completely fee-free.

How Can I Compare Mortgage Lenders in the UK?

If you’re thinking about switching lenders, it’s important to compare your options carefully.

1. Work with a Trusted Whole-of-Market Mortgage Broker

Working with a whole-of-market mortgage broker – like Boon Brokers – gives you access to the latest mortgage products from a wide range of lenders. This comprehensive approach ensures that you have a trusted expert in your corner, helping to find you the most suitable mortgage options that are tailored specifically to your financial needs.

2. Request a New Mortgage Illustration

Ask your new lender for a Mortgage Illustration (also known as a Key Facts Illustration). This will outline the interest rate, monthly repayments, product fees, and total cost of borrowing.

3. Confirm if a New Property Valuation Is Required

Some lenders may accept an existing valuation, but others will insist on carrying out their own. This could come with an additional fee and a delay of several days.

4. Reapply and Provide Updated Documentation

To secure a mortgage with a new lender, you’ll need to submit a fresh mortgage application. In this application, you will need to provide updated payslips, bank statements, and proof of ID, even if you’ve recently submitted these elsewhere.

5. Inform Your Solicitor Immediately

Let your solicitor know that you’re switching lenders, so they can update the legal paperwork accordingly. This will help avoid unnecessary delays later in the process.

What’s the Best Way to Review Mortgage Offers?

When you’re happy with your chosen lender and have received an official mortgage offer, it’s essential to take the time to review it carefully. This helps ensure it aligns with both your short-term budget and long-term financial goals.

Start by reviewing the total cost of borrowing, not just the monthly repayments. Look closely at the interest rate and any product fees, including arrangement, booking, and valuation charges. These costs are typically combined into the Annual Percentage Rate (APR), which will provide a clear insight into what you’ll be paying over the full term of the mortgage.

Secondly, check the length of the offer period. Make sure that you confirm that the lender’s valuation aligns with the agreed purchase price. If the mortgage valuation comes in lower than expected, the offer may be revised or withdrawn, which could affect your deposit or borrowing amount.

Finally, look at any early repayment charges, overpayment limits, or restrictions that could impact your flexibility later on.

If you are unsure on any aspect of your mortgage offer, contact either your solicitor or mortgage broker to help you review the offer in detail before proceeding.

How Long Does a Mortgage Offer Last?

In the UK, most mortgage offers are valid for between three and six months, giving you time to complete the legal process and exchange contracts.

Your offer will be accompanied by documents outlining both the expiry date and any conditions attached to the agreement.

It’s important to check these details carefully. If you think delays may prevent you from completing in time, contact your lender or broker as early as possible to request an extension – ideally well before the offer expires.

What If the Valuation Comes in at a Lower Price?

If the mortgage valuation comes in lower than the agreed purchase price, it can have a significant impact on your application. In most cases, the lender will reduce the amount they’re willing to lend – a situation known as a down valuation.

This shortfall could affect your affordability or require you to increase your deposit to bridge the gap. For example, if you were expecting to borrow 90% of the property’s value and the valuation is lower than expected, your Loan-to-Value (LTV) will increase, potentially pushing you into a higher-risk category with less favourable rates.

In these situations, you typically have three main options:

• Renegotiate the purchase price with the seller to reflect the lender’s valuation.
• Increase your deposit to make up the difference.
• Look for alternative lenders who may value the property differently (though this isn’t guaranteed and could delay the process).

Speaking to a mortgage broker like Boon Brokers can provide you with clarity during a down valuation. Our dedicated mortgage advisers can assess your options, negotiate with lenders where possible, and help you secure a more suitable deal based on the revised property value.

Can a Mortgage Broker Help Me Compare Mortgage Deals?

In short: Yes. A whole-of-market mortgage broker can help compare mortgage products from a wide-panel of lenders. This allows them to compare rates, fees, and terms on your behalf.

In the long run, this expert insight can help you save you time, money, and stress, and can be especially helpful when you’re deciding on whether to switch mortgage lenders or products.

How Do Mortgage Brokers Find Lenders?

Whole-of-market Brokers work with a host of lenders, ranging from popular high-street banks to more specialised lenders. At Boon Brokers, for example, we use advanced sourcing tools to compare your financial circumstances and preferences against hundreds of available mortgage products. This includes factors such as your income, credit history, deposit size, and long-term goals, helping us identify the most suitable deals for your situation.

Can a Mortgage Broker Get a Better Deal?

In many cases, a trusted and regulated broker will be able to secure mortgage deals with lower rates or products with reduced fees that are not open to the public. Additionally, they will be able to help you assess the total cost of switching mortgage lenders.

Can I Switch to an Interest-Only Mortgage?

Switching lenders and mortgage products to an interest-only mortgage is possible, but only if you meet the lender’s criteria.

You’ll need a credible repayment plan and typically a larger deposit. Working with a trusted mortgage broker – like Boon Brokers – can help you determine if this is a viable option.

Do Mortgage Brokers Charge a Fee or Get Paid by Lenders?

All mortgage brokers are paid a commission by the lender when a mortgage completes – but some brokers may charge additional fees on top of this.

Some brokers choose to charge additional fees on top of the commission they receive. These client-facing charges can vary in both amount and structure, ranging from fixed fees to hourly rates or even percentage-based costs, depending on the broker’s model.

At Boon Brokers, we are proud to be a completely fee-free mortgage broker, meaning we never charge our clients for advice, sourcing, or handling their mortgage application.

We rely solely on the standard commission paid by the lender. That’s why with Boon Brokers, you can rest assured that you will receive whole-of-market mortgage advice, full support throughout the application process, and expert guidance tailored to your circumstances – all at no cost to you.

For a detailed explanation on the cost of mortgage brokers and the different payment structures, read our article on How Much Do Mortgage Brokers Charge?

What Documents Will I Need When Switching Lenders?

When you applying for a mortgage application with a new lender, you’ll need to provide the usually documentation and proof, including:

• Proof of ID and Address: Valid documents such as a passport, driving licence, or recent utility bill to confirm your identity and residence.
• Income Verification: Recent payslips (typically the last three months) for employed applicants, or two years of certified accounts if you’re self-employed.
• Bank Statements: Statements from the past three months to demonstrate your financial activity and affordability.
• Details of Credit Commitments: Full disclosure of existing financial obligations, including loans, car finance agreements, credit cards, and any other credit facilities.

Having these documents ready can help speed up the reapplication process and reduce the risk of delay.

Is It Worth Switching Mortgage Lenders Mid-Application?

Whether it is worth switching mortgage lenders will wholly depend on your personal financial situation and the lender and mortgage product that you’re currently applying for. As such, switching mortgage lenders mid-application can often help you save money, however, it’s not always the best choice for everyone.

Before making a decision, it’s important to compare mortgage offers carefully, consider your timeline, and factor in any additional costs such as fees or valuation charges.

Working with a fee-free mortgage broker can provide clarity by reviewing your individual circumstances, explaining the full financial impact, and helping you weigh the pros and cons.

At Boon Brokers, we specialise in delivering expert, whole-of-market mortgage advice tailored to your needs. Our dedicated advisers are here to guide you through every step of the mortgage process, whether you’re buying your first home, remortgaging, or switching lenders mid-application.

Contact Boon Brokers today for fee-free, personalised advice and start your mortgage application right.