How good is your mortgage lender?

Will your lender play fair when your current deal comes to an end, or rip you off by moving you onto a ridiculously high rate? Let's find out...

If your special rate deal is about to come to an end, and you're looking for a new mortgage, you can't fail to notice that the very best rates are still reserved for borrowers with a lot of equity in their homes.

If you're starting to think your lender's standard variable rate (SVR) mortgage is probably the best you can do, don't despair.

Luckily, the SVR is no longer the terrible demon of the mortgage market it once was. After a string of base rate cuts, excessively high SVRs are long gone. This means borrowers who don't - or can't - remortgage at the end of their special rate deal, won't be stuck with an ultra-expensive home loan.

And thank goodness for that!

These days, SVRs are pretty competitive compared with the rest of the mortgage market. Take Lloyds TSB and Nationwide, for example, which have hard-to-beat SVRs of just 2.5%. In fact, many SVRS nowadays are exclusive, and only available to existing borrowers who are coming to the end of a special rate deal.

What if the SVR isn't for me?

That said, what happens if you don't want to be on the SVR? What if you'd prefer the peace of mind that comes with a fixed rate mortgage? Or, you like the idea of taking your chances with a tracker instead?  

If you can't remortgage because you don't have enough equity in your home, what are your options?

Some lenders have a range of special deals which are open to existing borrowers exclusively. But many are not worth bothering with - it really depends on the lender.

Let's take a look at five of the big players:

Abbey

The good news is Abbey are prepared to offer special rates to existing borrowers with a high loan-to-value (LTV) of 95% and over. That means, if you have equity in your home of 5% or less, you'll still qualify. But the bad news is, although a range of fixed and variable rates are available, the lender won't disclose what those rates might be because that depends on each borrower's individual circumstances.

Borrowers who have unfortunately fallen into negative equity will only be offered the SVR, which today stands at a reasonable 4.24%.

Halifax/Bank of Scotland

At Halifax, special deals are open to existing borrowers with a maximum LTV of 95%. If you'd like a fixed rate you'll be offered 5.19% over four or five years, with a product fee of £1,249. If a tracker is more up your street, the rate is 2.79% over the base rate for five years, with a current pay rate of 3.29% (the same fee of £1,249 applies).

Even better, if your LTV is over 95% - or you're in negative equity - Halifax will offer you the same rates which are available at 95% LTV, rather than forcing you onto the SVR.

Then again, seeing as Halifax's SVR is currently very low, at 3.50%, and you don't have to fork out the £1,249 fee to get it, you may prefer to just stay on that, instead.

Lloyds TSB/C&G

As I mentioned earlier, Lloyds TSB's SVR is tiny at just 2.50%. What's more, it's guaranteed to be no more than 2% above the base rate. If you're about to be moved on the SVR or you're already on this rate, you might decide it suits you fine - at least while the base rate remains low.

To be frank, you will have no other option if you have less than a 25% equity stake and want to stay with Lloyds. Special new deals for existing customers are only available up to a maximum of 75% LTV.

If you do have an equity stake of at least 25%, you could go for a fixed rates of 3.79% to 4.99% over a two, three or five year term, with product fees of £495 to £995.

Nationwide

Nationwide's Base Mortgage Rate (BMR) is only open to existing customers reaching the end of their current deal, and it's guaranteed to stay at just 2% above the base rate, so currently a tiny 2.5%.

The lender is prepared to lend up to 95% LTV on new products. That said, the rates on these deals are much higher than the base mortgage rate. Two and three year fixed rate deals are on offer with rates of 6.58% to 7.28% (depending on whether you pay a fee or not). And once you come off this deal, you'll be moved onto the Standard Mortgage Rate, which doesn't have a base rate guarantee like the BMR, and is currently 3.99%.

Right now, Nationwide isn't offering any tracker deals to existing customers.

Woolwich/Barclays

Woolwich borrowers will automatically be moved onto a lifetime tracker at the end of the special rate deal if they do nothing else. The new pay rate will depend on when the original deal was first taken out.

Woolwich tells me that customers, who are coming to the end of a deal now, will typically pay a tracker rate of 0.95% over the Barclays Bank Base Rate. That means the current pay rate is highly competitive, at just 1.45%.

(Note that the Barclays Bank Base Rate typically follows the Bank of England Base Rate, but it's not guaranteed to match it.)

Better still, Woolwich won't even take your LTV into consideration, which means the same rate will still apply regardless of the amount of equity you have in your home.

If you're a Woolwich borrower, it's well worth checking out what your rate would be before you consider switching to a different deal. But, if you don't like trackers, other options are available specifically for existing customers too.

On a final note, apologies if your lender isn't covered here. Make sure you contact them in good time before your current deal ends to find out exactly what they have on offer.  

If you need help switching to a new deal, you can get advice from our lovemoney.com mortgage brokers.

More: Cap your mortgage now | Don't be swayed by a fee-free mortgage