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How can I change my mortgage provider?

Let’s take a quick look at what switching mortgage providers could mean for you, and what things you need to look out for if you decide to switch.

Paper and pen on a table as a customer considering if they should change their mortgage provider

Looking for a better mortgage deal? Then it might be time to change your mortgage provider. Usually, homeowners switch mortgage providers to find a cheaper deal and save thousands over their mortgage terms - but there are other financial costs to consider before switching.

Let’s take a quick look at what switching mortgage providers could mean for you, and what things you need to look out for if you decide to switch.

What does it mean to switch mortgage providers?

This process is officially known as refinancing. It’s when you change lenders - for example, from RAKBANK to Emirates NBD - and is usually done to secure a better mortgage deal with lower interest rates.

Refinancing is different from a ‘product transfer’, which simply means switching your mortgage deal but staying with your current lender.

When should I change mortgage provider?

Most people change their mortgage provider once their fixed-term mortgage comes to an end after 1, 2, 3, or 5 years. After this, your interest rates will increase to either an EIBOR-based variable rate or your lender’s own internal lending rate. This will be for the remainder of your mortgage term - meaning you’ll have to pay more interest. So it’s usually better to find another mortgage deal that offers better terms that will save you money in the long run.

You can usually start applying for a new mortgage up to six months before the date you need it to start.

What fees will I need to pay to change my mortgage provider?

Before committing to changing mortgage provider, you should be aware that it carries additional costs, just in the same way applying for a mortgage on a new home does. Here are the fees you may need to pay:

  • Liability letter fee (this can be up to AED 1,000 + VAT, but not all banks charge this fee)

  • Early settlement fee (1% of the mortgage loan, capped at AED 10,000)

  • Processing fees from your new bank

  • Mortgage discharge fee to Dubai Land Department (between AED 1,590 - AED 1,860 depending on whether it is a conventional or Islamic mortgage)

  • A mortgage registration fee to the Dubai Land Department (0.25% of loan amount + AED 290)

  • Trustee fee (AED 4,000 + VAT)

I’m ready to switch - what do I need to do?

Ready to find a better deal? Then here’s what you need to do:

  • The earlier you prepare, the better chance you have of getting approved for a new mortgage. Get all your paperwork prepped in advance and check your credit score to make sure it’s not going to give you any surprises!

  • Start looking for a better deal around six months before your current mortgage deal expires. You can get in touch with our friendly in-house team of mortgage experts if you need some advice. They don’t charge a fee and have access to over 500 mortgage options!

  • Once you’ve found the best mortgage offer for you, then start preparing your application. We can help you with that too!

  • If all your paperwork is correct then your new mortgage provider will issue a deal for you to sign and return. This will usually be valid for up to six months.

  • Once the legal work is complete, you’ll get a completion date for when the old mortgage closes and the new one starts - double-check that your new mortgage doesn’t complete too early!

  • On completion, your old lender will draw down the funds and pay off your old lender, so your debt is now with the new mortgage provider.

  • That’s it! Your next monthly payment will be to your new lender.

Looking to change mortgage provider? We can help

If you’re interested in switching mortgage providers to find a better deal, then we can help :)

Huspy is a free online mortgage broker with access to over 500 mortgage offers and can help you find the best deals tailored for you in just a matter of minutes. Plus we have a friendly team of experts who are here to help you every step of the way - without charging a single dirham.

Written by Huspy Team

Published on 21 June 2021

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