Introduction
We helped our customers in Camberley, Surrey, arrange a new fixed-rate mortgage on their shared ownership property as their existing deal approached its expiry date.
They wanted to avoid moving onto Barclays’ Standard Variable Rate (SVR) while keeping their monthly mortgage payments predictable and avoiding unnecessary fees.
After comparing remortgage options with the products available from their existing lender, we arranged a fee-free product transfer with Barclays. This allowed our customers to secure a new fixed rate without the additional legal work, property valuation and housing association administration that could have been involved in switching lenders.
Find out Your Options
The Scenario
Our customers were existing homeowners who had purchased their property through a shared ownership scheme.
Shared ownership allows buyers to purchase a share of a property rather than buying it outright. This means mortgage arrangements can differ from those for properties owned in full, particularly when switching lenders or purchasing additional shares.
Their existing mortgage with Barclays was approaching the end of its fixed-rate period, and they wanted to review their options before the lender’s Standard Variable Rate became applicable.
One customer was employed, while the other was self-employed with an established trading history.
They held a repayment mortgage, with the outstanding borrowing representing approximately 49% of the recorded value of their ownership share.
Their priorities were straightforward: secure a suitable new fixed rate, keep the monthly mortgage payments manageable and avoid unnecessary costs associated with arranging their next mortgage deal.
They also preferred a process that did not involve extensive paperwork or additional third-party administration.
The Challenge
The biggest hurdle was identifying the most suitable way to secure a new mortgage product while accounting for the additional considerations associated with shared ownership.
Shared Ownership Remortgage Requirements
Unlike a conventional property owned outright, a shared ownership home involves an ownership arrangement with a housing association or another provider.
Moving a shared ownership mortgage to a different lender can therefore involve additional requirements.
Depending on the lender and the terms of the shared ownership arrangement, these may include housing association involvement, legal work and a new property valuation.
These additional processes can increase the overall cost of remortgaging and potentially delay the transaction.
We needed to establish whether the potential benefits of moving to another lender justified the additional work and associated expenses.
Comparing Mortgage Rates and Fees
Our customers wanted a competitive fixed rate but did not want to pay unnecessary arrangement or legal fees.
This meant considering more than the mortgage interest rate alone.
A remortgage product offering a lower rate could potentially become less attractive once any lender fees, legal expenses and other costs were included.
We therefore needed to compare the overall cost of the available options rather than focusing solely on the headline rates.
Different Employment and Income Arrangements
One customer was self-employed, while the other received income through employment.
If they moved to a different lender, their income would generally need to be assessed against that lender’s affordability and underwriting requirements.
The self-employed income and supporting accounts could therefore have added further documentation requirements to a full remortgage.
An existing lender product transfer offered an alternative that could avoid the need for a full reassessment of their income.
What We Did
Reviewed the Existing Mortgage
We began by reviewing our customers’ existing Barclays mortgage, including the outstanding borrowing, current product arrangements and upcoming rate expiry.
We also updated their financial information to understand their household budget and borrowing requirements.
This helped us establish what they wanted from their next mortgage product and the importance of limiting additional costs.
Compared Remortgaging with a Product Transfer
We researched mortgage options across the wider market and compared these with the product transfer rates offered by Barclays.
Our review considered the available fixed-rate products, lender arrangement fees and the potential costs associated with moving the mortgage to another provider.
We also considered the practical implications of remortgaging a shared ownership property.
Changing lenders could have involved new legal work, valuation requirements and potential housing association administration.
These were important considerations when assessing whether moving lenders would offer a worthwhile overall benefit.
Reviewed Barclays’ Shared Ownership Product Transfer Options
We investigated the fixed-rate retention products available to our customers through Barclays.
We also contacted the lender and a business development manager to discuss the circumstances before proceeding.
The product transfer route allowed our customers to remain with Barclays and select a new mortgage rate without undergoing a full remortgage process.
This avoided the need for a new property valuation, legal conveyancing and additional housing association involvement for the rate switch.
Arranged the New Mortgage Product
After comparing the available options, we recommended a fixed-rate product transfer with Barclays.
The selected product had no lender arrangement fee, and Kerr & Watson did not charge our customers a broker fee for arranging the switch.
We completed the product transfer arrangements through the existing lender’s process, keeping the administration straightforward.
We also arranged ongoing monitoring of the available mortgage rates before the new product took effect.
The Solution
We arranged a Barclays shared ownership mortgage product transfer on a fixed-rate, capital repayment basis.
The mortgage arrangement included:
- Lender: Barclays
- Transaction: Shared ownership product transfer
- Mortgage type: Residential capital repayment
- Loan-to-value: Approximately 49% of the recorded value of the owned share
- Lender arrangement fee: None
- Kerr & Watson broker fee: None
- Additional borrowing: None
The product transfer allowed our customers to secure a new fixed rate without changing mortgage lenders.
It also avoided the additional legal and administrative requirements that could have arisen from a full remortgage to another lender.
Why This Solution Worked
The main advantage was that Barclays could offer a suitable new mortgage product through its existing customer retention process.
Because our customers were not increasing their borrowing or changing the underlying mortgage arrangements, the rate switch could proceed without a full affordability reassessment or property valuation.
This was particularly useful given their shared ownership arrangements and different employment circumstances.
The fee-free product also met their preference for avoiding additional costs.
By remaining with Barclays, our customers secured the payment stability they wanted without undertaking a more involved remortgage process.
The Result
Our customers successfully secured a new fixed-rate mortgage product with Barclays before their existing deal expired.
They were able to remain with their current lender, avoiding the need for additional conveyancing, valuation work or housing association administration associated with moving the mortgage elsewhere.
The new product also involved no lender arrangement fee or Kerr & Watson broker fee.
We arranged ongoing rate monitoring ahead of the new product taking effect, allowing us to review whether any further improvements became available.
The outcome addressed our customers’ main requirements: securing a new mortgage rate, keeping payments predictable and minimising the cost and administration of changing products.
What This Case Shows
When a shared ownership mortgage is approaching the end of its fixed-rate period, remortgaging to another lender is not always the most suitable option.
Although changing lenders may provide access to different mortgage products, shared ownership arrangements can introduce additional legal, valuation and housing association requirements.
An existing lender product transfer may offer a simpler alternative when the available rates and terms are suitable.
This case is an example why comparing the overall costs of remortgaging against remaining with the existing lender is important, rather than choosing a product based on its interest rate alone.
Need to Review Your Shared Ownership Mortgage?
If your shared ownership mortgage deal is approaching its expiry date, Kerr & Watson can compare product transfers with remortgaging options to help you understand which may be more suitable.
We provide independent, whole-of-market mortgage advice in Camberley and the surrounding areas.
Contact Kerr & Watson to discuss your shared ownership mortgage options.
