If you ask to transfer your current mortgage to a different property your lender will probably assess your application as if you are a new customer. If you have since become self-employed or are earning less than you were when you took out your existing loan there is a high chance you could even have your
mortgage application rejected, especially if the loan:value ratio has increased due to falling property prices.
The fees and costs can be huge for those unable to transfer their existing loan to a new property. Your current lender will charge about £100 for sending a reference to your new lender, it could also hit you with an early redemption charge of around 5% of the remaining loan for fixed-rate mortgages. In addition, once the transfer has taken place you will be charged fees: £50 for transferring the deeds, £30 to transfer the money to the new lender, and £250 to close the account. This is in addition to the fees charged to set up the mortgage with the new lender, which include £999 application fee, valuation fee and legal fees.
So to transfer an average £140,000 mortgage to a new lender the total fees could amount to a massive £1,800 (£8,800 including the early redemption penalty)
