Top of main content

How to change your mortgage deal

Switching your mortgage, whether it’s with the same lender or a new one, can have many advantages.

From getting a better deal on your interest rate, to increasing your loan term and reducing your repayments, there are many reasons why you might want to switch your home loan.

In this guide, we cover the benefits and costs of switching your mortgage, and explain how the process works.

6 reasons to switch your mortgage

1. Get a new interest rate

If your fixed-rate mortgage term is coming to an end, you might want to take out another fixed-rate deal rather than revert to your bank’s variable-rate mortgage. A variable rate will go up and down with the EIBOR (Emirate Interbank Offered Rate).

Or, if you’re on a variable rate already, you might feel more comfortable on a fixed-rate mortgage where your repayments stay the same each month.  

Finally, you might have just spotted a better deal somewhere else and want to make the most of a lower interest rate.

Explore: View our current home loan rates

2. Balance transfers – consolidate your banking

If your bank account, credit card and investment account are all with the same bank but your home loan isn’t, it might make sense to transfer the balance of your mortgage to your bank so everything’s in one place. That’s as long as it doesn’t cost you more in the long run.

Explore: Balance transfers with HSBC

3. Extend your mortgage term

You might want to remortgage simply to extend the duration of your home loan. Extending from 20 to 25 years, for example, will give you more time to repay your loan, and make your monthly repayments smaller.

4. Pay back your mortgage early

On the other hand, if you like the idea of being debt-free sooner and have the cash flow on hand to do so, you could switch to a mortgage that lets you make bigger repayments each year without an Early Settlement Fee (ESF).

With an HSBC mortgage, you get an overpayment allowance of up to 25% per calendar year, giving you extra flexibility.

5. Remortgage at a better loan to value (LTV)

Your LTV ratio is the amount you’re borrowing as a percentage of the value of your property. The more of your own money you put towards buying your home as a down payment, the lower your LTV will be.

When you take out a home loan, your LTV can affect the interest rate you get.

Generally speaking, with a lower LTV, you’ll get lower interest rates to choose from as it’s less risky for your lender.

So, if you’ve been repaying your mortgage for the last 5 years, for example, you may be able to remortgage at a lower LTV than when you originally bought your home.

Explore: Our fixed-rate home loans

6. Release equity from your property

If you’ve paid off a considerable chunk of your existing mortgage, you could apply to release equity from your property.

As you’ll be applying to borrow more money in this situation, it’s a more complicated process than just switching your rate, including a credit check when you apply.

Things to watch out for when remortgaging

You may incur some costs when switching your mortgage deal. The main one to be aware of is an Early Settlement Fee (ESF).

If you have a fixed-rate mortgage, there will likely be an ESF if you switch or repay your loan before the end of the fixed term.

Even if you have a variable-rate mortgage, you could still be charged an ESF for switching before a certain point, so check with your lender first and weigh up whether switching is worth it.

  1. a mortgage arrangement fee or a balance transfer arrangement fee
  2. a valuation fee
  3. a mortgage registration fee (to the Land Department)

How long does it take to switch mortgages?

If you’re sticking with the same lender, switching mortgages can take as little as a few working days.

If you’re transferring your mortgage to a new lender, it could take up to 14 working days or more.

Explore: Our variable-rate mortgages

Explore more

Everything you need to know about the different types of home loans.
Find out the pros and cons of paying off your mortgage early.
Choosing whether to buy or rent your home is a difficult decision, but our guide can help you decide which could be the better option for you.


This article provides general information about mortgages. HSBC UAE may not offer all the products or options mentioned. This article should not be relied upon as financial advice.