A common complaint about switching mortgages is the length of time it takes. According to a July 2016 article from MortgageStrategy.co.uk, however, the government is in consultation about how this could be made quicker, and has suggested that it could be possible to switch mortgages within seven days or less.
With many lenders offering attractive mortgage interest rates, there has been surge in remortgage activity as borrowers switch mortgages to ones with a lower rate. The value of UK remortgages was £7.1bn in July which was almost a 25% increase on June’s figures.
Remortgaging can be a lengthy process requiring a property valuation and legal procedures. It takes less time if remortgaging to a better deal from an existing lender.
The government is looking at ways to speed up switching. It would like to see the time from an application to the completion of the loan be seven days. Paul Smee, the Director General of The Council of Mortgage Lenders, recognises that by using digital technologies the switching process could be speeded up, but still thinks that a seven days could be unrealistic.
The Building Societies Association, meanwhile, is concerned that fast switching could encourage impulsive decisions. Quoted in the MortgageStrategy.co.uk article, its Head of Mortgage Policy, Paul Broadhead, said:
“What we can say with some degree of confidence is that a system that encourages consumers to make quick, impulsive decisions about mortgages is likely to lead to poor, ill-informed consumer decisions.
“Refinancing your mortgage isn’t like taking out a different mobile phone or broadband contract, or changing your energy provider.”