Do I Have to Refinance with the Same Lender? What Are the Options for Residential and Commercial Borrowers

It’s understandable why many will be raising the question: “do I have to refinance with the same lender?” Refinancing is set to take centre stage over the coming months in the lending landscape.

According to analysis from Bayes Business School[1], around £71bn worth of outstanding commercial loans would need to be refinanced between mid-2024, and mid-2025. What’s more, the ONS expects the UK mortgage market to be worth £216bn this year[2]. Around £58bn of this will be dedicated to remortgaging, accounting for just over a quarter (26.9%) of the gross market value.

Anyone who isn’t thinking about their refinancing options now will want to get the ball rolling sooner rather than later. With that said, let’s explore the market, and its options.

Do I Have to Refinance With the Same Lender?

In a word: no. Those coming to the end of a loan term, whether it be a regulated mortgage or bridging loan, do not need to refinance with their existing lender. Technically, moving from one product internally to another deal is known as “product transferring[3]”. Generally, many refer to both internal and external transfers as refinancing.

Borrowers need to be aware of what they’re doing though, and not get complacent. Refinancing does not involve merely adjusting one’s current mortgage or loan. It is the process of replacing an existing product with a new one.

This new product will likely have an entirely new set of terms, and intricacies. As such, borrowers need to understand what’s the right option for their circumstances.

The Pros of Refinancing With the Same Lender

Borrowers not only need to ask themselves do I have to refinance with the same lender, but also why should I. There are several reasons why a borrower may want to stay with their existing provider.

To start with, the familiarity between the two parties will likely result in a smoother process. Given that the lender involved will have already approved the borrower and covered a lot of due diligence, it will typically be quicker and easier to refinance with an existing lender[4].

This can provide comfort to borrowers who are unsure of their external options, or even if they’ll be accepted by other lenders. Refinancing internally may also be the right decision for one’s budget. By refinancing internally, borrowers could avoid closing costs. Also, while they may not get the best rate available in the market, they could secure a better deal by sticking with the same lender.

Then there are the administrative benefits. Keeping one’s property finances/mortgage in the same place that may also feature a borrower’s savings, and investment accounts will make it easier to keep track of all of one’s financial affairs in a single location.

The Cons of Refinancing With the Same Lender

Many of the cons around refinancing with the same lender involve opportunity cost. If borrower’s refinance internally, they could end up missing out on better interest rates, terms, or lower fees elsewhere.

Some may not even be aware that there are more niche products in the market that may better serve their goals. For example, in 2024, 1 in 7 (14%) of customers remortgaged specifically to fund home improvements, according to data from the broker Mojo Mortgages[5]. While doing this internally may get the job done, the borrowers involved may miss out on tailored products such as Permitted & Light Development Bridging Loans that are designed from the ground up to support these plans.

Ultimately, borrowers don’t need to address the question of do I have to refinance with the same lender alone. Brokers can help them find the best products for their circumstances. Meanwhile, financial advisors, accountants, and other experts may be able to help with investment decisions.

The Role of Specialist Finance

To reiterate, the market may be underestimating how crucial it is to get on top of all this in 2025. In their own forecast, UK Finance expects internal product transfers to hit £254bn this year, up 13% on 2024[6]. Meanwhile, external remortgaging could rise by 30% to £76bn. At the same time, new BTL purchase lending may drop by around 7%.

It’s unclear if mainstream lenders are ready for rising demand for refinancing products. Some major names[7] reportedly seem to be struggling to maintain their presence on the high street entirely[8]. Also, a mis-sold car finance scandal looms which could prove as substantial as the PPI saga[9].

Given these potential issues, property investors may turn to the specialist finance for support. Fortunately, at Market Financial Solutions, we have a range of refinancing options available for residential, BTL, commercial, and mixed-use investments.

We can also help with the “do I have to refinance with the same lender” question. Our bridging borrowers can refinance onto one of our BTL mortgages for the exit strategy if it suits their circumstances, and vice-versa.

Whatever collectively lays ahead of us in 2025, we will be there for borrowers with tailored refinancing, and acquisition solutions.