Remortgaging From TSB

Why Do TSB Customers Remortgage to a New Lender?

TSB mortgage holders switch lender for a variety of reasons. The most frequently cited include:

• Reverting to the SVR — TSB's standard variable rate of approximately 7.49% is a significant step up from the introductory rates most borrowers initially secured. Moving to a new deal can bring payments back down to a manageable level.
• IT platform concerns — TSB experienced a well-publicised IT migration failure in 2018 when transitioning its banking systems to Sabadell's platform. While the issues have largely been resolved, some customers lost confidence in the bank's digital infrastructure and prefer to bank elsewhere.
• Smaller product range — As a mid-sized lender, TSB's mortgage product range is not as extensive as some larger competitors. Borrowers may find that other lenders offer better rates or more flexible terms for their particular circumstances.
• Branch network reductions — TSB has closed a number of branches in recent years, which can be inconvenient for customers who prefer face-to-face service. Remortgaging to a lender with a larger branch presence, or one with a superior online platform, can improve the banking experience.

Regardless of your reason for considering a move, remortgaging from TSB is a straightforward process that thousands of borrowers complete successfully every year.

TSB's Standard Variable Rate and How It Compares

The TSB standard variable rate is currently around 7.49%. This is the rate your mortgage will automatically move to once your initial fixed, tracker, or discount period comes to an end, unless you proactively arrange a new deal.

To illustrate the potential savings from remortgaging, consider a £175,000 repayment mortgage over 25 years:

• At 7.49% (TSB SVR) — monthly repayments of approximately £1,294
• At 4.50% (competitive fixed rate) — monthly repayments of approximately £972
• Potential monthly saving — around £322 per month, or over £3,860 per year

TSB's SVR is set independently by the bank and can change at any time. It broadly tracks the Bank of England base rate but with a significant margin added. While TSB does review its SVR when the base rate changes, there is no guarantee that any base rate reduction will be passed on in full to SVR borrowers.

This uncertainty is one of the key reasons why financial experts consistently recommend that homeowners avoid staying on their lender's SVR for any longer than necessary.

Steps to Remortgage From TSB

If you have decided to explore remortgaging from TSB, the following steps will guide you through the process:

• Gather your mortgage details — Contact TSB or check your online banking to find your current mortgage balance, interest rate, any early repayment charges, and the date your deal expires. You will also want to know your original mortgage term and how many years are remaining.
• Estimate your property value — Knowing your approximate property value allows you to calculate your loan-to-value ratio. Properties with more equity generally qualify for better mortgage rates. You can use online valuation tools or request a market appraisal from a local estate agent.
• Consult a mortgage broker — A broker with access to the whole market can search for the best deals based on your specific needs, whether that is the lowest possible rate, a fee-free product, or a deal with generous overpayment options.
• Apply and await approval — Your new lender will conduct affordability and credit checks and instruct a valuation of your property. Many lenders offer free valuations and free legal work for remortgage applicants.
• Complete the transfer — The appointed solicitor will obtain a redemption figure from TSB, handle the legal paperwork, and transfer your mortgage to the new lender. This process typically takes four to eight weeks.

Starting the process early, ideally three to six months before your TSB deal ends, ensures you have time to compare options thoroughly without any pressure.

What to Check Before Switching From TSB

Before proceeding with a remortgage from TSB, review these important considerations:

• Early repayment charges — TSB applies ERCs during the initial deal period. These are typically stated as a percentage of your outstanding balance and reduce each year. Leaving during the ERC period may still be worthwhile if the savings from a lower rate outweigh the charge, but it is important to do the calculation first.
• TSB product transfer options — TSB offers existing customers the ability to switch to a new rate without the need for a full remortgage. Product transfers are quicker, involve less paperwork, and do not require a new property valuation. However, the rates may not be the best available, so compare them against external offers.
• Cashback or incentives — If TSB offered you any cashback or incentives when you originally took out the mortgage, check whether there are any clawback provisions that apply if you leave within a certain period.
• Insurance products — If you purchased mortgage protection insurance, buildings insurance, or other products through TSB, these may need to be reviewed or replaced when you switch. Your new lender will have their own requirements regarding buildings insurance.
• Direct debits and standing orders — Your mortgage direct debit with TSB will be cancelled as part of the redemption process. Ensure you set up the new payment with your new lender promptly to avoid any missed payments.

The Benefits of Using a Broker to Leave TSB

Engaging a mortgage broker when remortgaging from TSB provides several practical benefits that can improve both the outcome and the experience:

• Access to exclusive deals — Many lenders offer broker-exclusive rates that are not available to applicants who approach the lender directly. These exclusive products can sometimes offer lower rates or reduced fees compared to direct-to-consumer deals.
• Impartial comparison — A broker has no allegiance to TSB and will objectively compare their product transfer rates against the wider market. This ensures you are making a decision based on the best available information rather than being limited to what TSB offers.
• Guidance on timing — A broker can advise on the optimal time to remortgage, taking into account market conditions, your ERC schedule, and the validity period of mortgage offers. Getting the timing right can make a meaningful difference to your savings.
• Support with complex situations — If you have experienced changes to your financial situation since taking out your TSB mortgage, such as becoming self-employed, taking on additional debt, or experiencing credit difficulties, a broker can navigate the more complex lender criteria to find a suitable deal.

The majority of mortgage brokers earn their fee through commission paid by the lender, so their advice comes at no direct cost to you. Always ask your broker to confirm their fee structure before you begin.