Regarding the switch to a fixed-rate deal with a lower LTV than the original, which statement is true?

Regarding the switch to a fixed-rate deal with a lower LTV than the original, which statement is true?

• A. They may have to pay another higher lending charge.
• B. It is likely to be less costly to arrange than a remortgage.
• C. There will never be any product fees to pay.
• D. They would have to allow for conveyancing costs.

Answer: (B)

Switching to a fixed-rate deal with a lower loan-to-value is usually treated as a product switch within the same lender rather than a full remortgage. Because the loan is smaller relative to the property's value, the lender's risk is reduced and the process is simpler, so the arrangement tends to be cheaper than setting up a new deal with a different lender. You may still encounter a product fee for the new rate, but you typically avoid the broader costs associated with remortgaging, such as valuation and conveyancing.

Switching to a fixed-rate deal with a lower loan-to-value is usually treated as a product switch within the same lender rather than a full remortgage. Because the loan is smaller relative to the property's value, the lender's risk is reduced and the process is simpler, so the arrangement tends to be cheaper than setting up a new deal with a different lender. You may still encounter a product fee for the new rate, but you typically avoid the broader costs associated with remortgaging, such as valuation and conveyancing.