Mortgage switching time could be reduced to one week

June 3, 2016 by Brendan O'Neill

Lenders

A consultation document is being considered by the government to see whether it is possible to enable borrowers to switch their mortgage to a new lender in as little as one week.

Currently, it may take up to three months to change to a new lender, although proposals suggest that it should take the same amount of time as switching a bank account. The government wants to make it easier for consumers to switch to cheaper providers for other services too, including broadband, energy and bank accounts. The new plan may mean that mobile phone providers would have to unlock a phone at the end of a contract, free of charge.

The business secretary, Sajid Javid, explained that he wants to give consumers the power to switch deals so that they receive the best value. However, critics state that switching a mortgage is more complex than switching bank accounts, as affordability checks and property surveys are required, which may take longer than seven days.

https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpg Harris, the chief executive of SPF Private Clients, a mortgage broker, said that frequent switching of a mortgage could have an impact on a person’s credit rating. Harris also steted that the process may push up the cost of mortgages. He warned that cheap mortgages are based on the length of time a customer is expected to remain with the lender, which could change if they become short term.

Before considering swapping mortgage deals, speak to a mortgage adviser who is CeMAP trained.