LOCK-AND-CHANGE - CHOOSE A NEW DEAL EARLY WITH YOUR EXISTING LENDER, WITH THE OPTION TO CHANGE IT SHOULD RATES FALL BY DANIEL MCLARDY
This information is for our clients regarding our lock-and-change product transfer service. If after consultation you elect to take a new deal with your existing lender, we can lock in the new rate for you with the option to change it should interest rates fall.
WHY DO WE OFFER THIS SERVICE?
Mortgage lenders have what is called their "product switch window", which is the point from which they commence offering new mortgage deals to existing customers, in a bid to keep your custom. This window typically commences between 3 and 6 months before the initial rate period on your mortgage ends. Our Lock-and-Change service therefore allows a new mortgage deal to be secured initially, with the option to change it within the product switch window.
PEACE OF MIND
The service gives our clients the security of knowing they have a new rate locked in, but won't miss out if rates fall afterwards.
WHY DOES THIS SERVICE GIVE OUR CLIENTS AN ADVANTAGE?
We have direct access to the lenders' mortgage application and execution systems, which allows us to cancel a product switch application and rebook our clients to a better deal should rates fall. A significant proportion of lenders do not offer this function via their direct-to-consumer interfaces. This is because from an administrative point-of-view lenders consider such an option to be a potential strain on their systems and/or they believe such a decision should go through a regulated mortgage adviser to prevent consumers making mistakes.
WHAT IS THE COST?
We do not charge for this service, but we do ask clients to exercise "reasonable use" and take the time to fully understand the principles behind it.
WHAT'S THE DEAL?
Here are the rules/principles/risks to ensure there are no misunderstandings between us:
(1) REQUEST DRIVEN - NOT A "RATE WATCHER SERVICE"
Probably the most important point of all, this service is primarily client-initiated. By this we mean you must get in contact with your Experts 4 Mortgages adviser to request a rate check, and establish if a lower-priced mortgage product has become available. We will of course endeavour to be proactive and update you on the direction of rates, but it's important to understand that we don't operate an automated "rate watcher" service.
(2) 35 DAY RULE
We operate a 35 day rule, where we set the expectation for clients that we provide this service up to 35 days before your new mortgage deal is set to commence. In some cases it may be possible to change your rate later than this, but this is dependent on the lender and we can indicate the possibilities during our personal discussions.
(3) REASONABLE USE
We absolutely want you to benefit should rates go down, though we kindly ask that you are considered and strategic about when you ask us to conduct rate checks for you. We are unable to sustain daily or multiple requests per week. My advice is to keep an eye on the news and see if there are any information "catalysts" that may make a rate check relevant. Again, we're 100% committed to helping our clients achieve a lower rate if possible, but please do be considered in your timing.
PQ's
> Is there a real chance this service could save me money on my monthly mortgage payments?
Yes, but it depends on market conditions and direction of interest rates. Historically our clients have benefited during an active mortgage market where global events have created a period of relative volatility with "calm after the storm". For example, as I write this a ceasefire extension between the US and Iran has been announced, and mortgage rates are starting to angle downwards. We believe this will allow us to reduce our clients' mortgage rates between 0.2% - 0.6% should the conflict continue a path of de-escalation. This translates to meaningfully lower monthly payments, particularly for those with larger loans.
> Do all lenders allow lock-and-change?
Most do, as a continuation from the introduction of the "Mortgage Charter", implemented by the UK government in 2023 to assist mortgage holders in managing the transition to higher interest rates. However, not all lenders offer it, and there are no guarantees that those offering it now will do so in to the long term future.
> Is it possible to completely cancel a product switch with my existing lender if a better deal is being offered by a different provider?
If checking rates from the whole-of-market reveals a different lender offering a better deal that you decide you wish to pursue, in most cases we can effect a cancellation to clear the path for a full remortgage.
> Are there any circumstances where you won't be able to execute a rate change?
The biggest risk of disappointment arises where clients give us late notice, so please do observe the 35 day rule or the guidance we provide you during our discussions.
