Switching to a new mortgage deal doesn't always require changing your lender. You can opt for a 'product transfer,' where you stay with your current lender but switch to a new mortgage deal. This approach can often be quicker, simpler, and potentially more cost-effective.

John Pringle, Mortgage Broker in Tottenham, North London said:

“During the process of a product transfer, there are some key factors to consider before you decide on this option. Seeking the advice of a professional mortgage adviser will help you understand if this option is right for you. The following article highlights these considerations.”

Consider the Advantages and Disadvantages of a Product Transfer

If your current mortgage deal is ending within six months and you don't plan on moving house, it's time to explore your options. Without action, you'll transition to your lender's standard variable rate (SVR), which is typically higher. To avoid this, you have two main choices:

• Product Transfer: Stay with your current lender but switch to a new deal.
• Remortgage: Move to a different lender for a new deal.

Most homeowners prefer the first option. Recent market data indicates that a large majority of borrowers choose product transfers due to rising interest rates and tighter affordability checks.

Here's a closer look at the pros and cons:

Mortgage Product Transfer Pros

• Potential for Competitive Interest Rates: Sometimes, existing customers receive better rates than new borrowers.
• Fewer Fees: Compared to remortgaging, product transfers usually involve only an arrangement fee. Legal and valuation fees are uncommon, and there's typically no exit fee.
• Minimal Paperwork: The process is straightforward if you're not borrowing more or changing the mortgage terms.
• No Affordability Check (Usually): Staying with your lender for the same loan amount and term often means no new affordability check, which can protect your credit file. However, some lenders may reassess affordability depending on their policies or changes in your financial situation.
• Quick and Easy Application: You can often apply online or over the phone, with fast acceptance.

Mortgage Product Transfer Cons

• Limited Choices: Your lender may have fewer product transfer deals available. A mortgage adviser can search the market to check for more cost effective mortgage products.
• No Guarantee of the Right Rate: Your lender isn't obligated to offer you the lowest rates available in the market.
• Affordability Check for Term Changes or Borrowing More: Changing the length of your mortgage term or increasing the loan amount may require an affordability check.
• No Name Changes: You can't add or remove names from the mortgage via a product transfer.
• Not Suitable for Moving House: If you’re moving, you’ll need a 'home-mover' mortgage or a remortgage.
• Potential Early Switching Restrictions: Some lenders may apply penalties or require new credit checks if you switch deals before the new rate starts.

Compare Product Transfer Rates to Remortgage Rates

If a product transfer seems appealing, start by comparing interest rates. While product transfer rates were less competitive in the past, as mortgage rates have risen, lenders have begun offering more attractive deals to retain existing customers.

Even if another lender offers a slightly better rate, a product transfer might still be preferable due to less hassle and fewer fees. A mortgage broker can review the mortgage market for the most appropriate alternative mortgage deals. 

Secure Your Product Transfer Early

Most lenders allow you to lock in a product transfer rate up to six months before your current deal ends, under the voluntary Mortgage Charter. However, this timing may vary by lender, so check your lender’s specific policies.

How to Secure a Product Transfer

Most lenders enable you to complete the process online or over the phone. However, it can be easier for a professional mortgage adviser to confirm if a product transfer is your best option and to handle the process on your behalf.

Paying Fees

Paying the arrangement fee upfront can help you avoid paying interest on it but offers less flexibility if a better rate becomes available later. Alternatively, adding the fee to your mortgage increases your monthly payments but provides flexibility to switch if rates improve.

Professional advice can help clarify the fees involved and any penalties for changing your mind before the new rate takes effect. While product transfers usually involve fewer fees than remortgages, you should expect to pay an arrangement fee and have the option to choose when to pay it.

Keep an Eye on Rates

Even after locking in a product transfer, it is wise to monitor the market for better rates until your new deal starts. Some lenders allow penalty-free switching if you find a better deal before the new rate begins. A mortgage broker can help monitor rates and advise if switching is beneficial.

In Summary

Navigating mortgages can be daunting, but understanding your options can save you significant time and money. A product transfer might be the best choice if you want a seamless transition with minimal hassle.

By seeking professional mortgage advice, you can make an informed decision that suits your financial situation and goals. Staying proactive and consulting a mortgage broker can help you find the most advantageous deal.

Sources: www.moneysavingexpert.com, www.gov.uk

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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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Thomas Oliver UK LLP is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority.

Approved by The Openwork Partnership on 29/08/2025.