Product Transfer Mortgages

Get in touch for a free, no-obligation chat about how we might be able to help you.

What's On This Page?

Get In Touch
1 Step 1
keyboard_arrow_leftPrevious
Nextkeyboard_arrow_right

Product Transfer Mortgages

Harry explains the process of a product transfer as opposed to a full remortgage.

What is a product transfer and how does it work?  

A product transfer is basically the process of reserving a new mortgage product and rate with your current lender, to start once your current product ends. 

Around three to six months before your current rate is due to end, you can lock in a new product and rate ready to transfer over. It creates a seamless transition from the old one to the new. It saves you falling onto the lender’s standard variable rate, which is significantly higher and much more expensive. 

What’s the difference between remortgaging and a product transfer?

When you remortgage, you’re basically raising funds elsewhere with another lender. It repays your current mortgage and you then borrow under the new lender’s product. With a product transfer, you’re selecting a new product and rate with your current lender, to start as soon as your current one ends.

Is it better to stay with your existing lender?

It certainly can be. A big benefit to a product transfer is that you aren’t financially reassessed. It can help if your income or circumstances have changed since you initially took out the mortgage, in a way that might impact your ability to borrow the required level of funds elsewhere – or even get another mortgage. 

It can also work out cheaper, as well. You don’t need to pay for any legal work as with a remortgage, or pay for any valuation costs which is also a positive.

When would I need a product transfer? 

You need to transfer three to six months before your current rate ends, mainly to avoid falling on to the lender’s standard variable rate, which is much, much higher.

An example of when to product transfer might be if you were employed on a salary when you took out the mortgage originally,  but you have recently gone self-employed. Generally you need two years’ tax calculations and overviews for a new mortgage. 

In that situation, you wouldn’t be able to borrow any money elsewhere, but you can do a product transfer with your current lender without any headaches. 

Can I product transfer early?

Yes, most lenders will allow you to lock in to a new product and rate up to six months before the end of the current product. That is really beneficial because by reserving a product early, you’re avoiding the stress of what interest rates might do in the future. 

If interest rates rise, it doesn’t matter, because you’ve already reserved your chosen rate. If interest rates fall, we can resecure the product at the lower rate. It’s a win-win.

Speak To an Expert
We can advise how much you can borrow, find the most suitable lender and have that Decision in Principle in place. Then, when you do make an offer on a property, you’re ready to go.

How long does a product transfer take?

The new product and rate replace the previous one, so it really doesn’t take any time at all. It happens instantly – as soon as the old product ends, the new one begins. 

The process is also pretty straightforward. It’s usually just a case of comparing the product transfer to the possibility of a remortgage elsewhere. We decide whether to transfer to one of your lender’s current products based on what best fits your needs and which offers the best true cost over time.

How much does a product transfer cost?

The new product may have a product fee, which is usually around £995 or £999, or lower – and in some cases higher. These can be paid upfront or added to the loan. 

That cost is the same as with a traditional purchase or remortgage. It’s not specifically for product transfers but it is definitely something to factor in. At Asset Harbour, we’d only charge an administration fee for doing the product transfer.

The good news is that you can actually save money through not having to pay for any legal work or valuation fees. Usually you’re saving more than you’re spending.

Do you need a credit check for a product transfer?

No, you don’t, and this is actually a huge benefit. It can be quite important for clients that may have picked up some adverse credit, or whose circumstances have changed since they originally took out the mortgage. There’s no credit check or anything like that.

Can you cancel a product transfer?

Due to all the recent volatility in interest rates, most lenders do allow brokers to cancel product transfers prior to completion and then resubmit them if required. Some also allow product transfers to be cancelled altogether. 

The mortgage can be submitted with an alternative lender if a more suitable option does become available.

How can a mortgage broker help with a product transfer? 

A mortgage broker can really help with a product transfer. Here at Asset Harbour we firstly compare a product transfer with a remortgage to another lender, because it is important to factor in all the options. 

If there’s another lender that’s offering a more competitive product and it presents a better true cost saving over the term, we’d certainly highlight that. 

If we’ve identified that the product transfer is the best true cost, the client is unable to raise the funds elsewhere, or simply just wants the convenience of staying with their current lender, we work out which of the current products best suits your needs. 

We will then reserve that product, and regularly check and reserve again if there are any rate reductions in the market. 

Assuming the product rate is reserved six months in advance, we could lock in a new rate four or five times as they’ve reduced. We do this day in, day out. We keep up-to-date with rate changes from each lender. We’re in the best position to capitalise on any movement in the market. We know that our clients live busy lives, working Monday to Friday – they just simply don’t have the time to stay up to date with all of that.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up with your mortgage repayments. 

You may have to pay an early repayment charge to your existing lender if you remortgage.