If the fixed term of your mortgage rate is about to end or if you’re currently stuck on your lender’s standard variable rate mortgage, now is the time to remortgage onto a new mortgage product.
You have two options available to you moving forward.
- Switch to a different mortgage lender
- Take out a mortgage product transfer with your current mortgage lender
Which is the best option for you? Well, that depends on which mortgage provider can guarantee you the lowest interest rates and lowest monthly repayments on your mortgage. If that is your current lender, then great, but to make sure they are offering you the best deal, it’s wise to speak to a mortgage broker who will compare the market on your behalf.
Read our guide on can you remortgage with the same lender. Alternatively, continue reading this guide to learn more about product transfer mortgages. Following this get in touch with our team if you require any further mortgage advice about a mortgage product transfer after reading our guide.
What is a product transfer mortgage?
A product transfer mortgage is a new mortgage deal with your current mortgage lender. So, rather than searching for another mortgage when your mortgage term ends, you can simply make the switch to a new product with a revised rate from your current lender.
You will usually receive a letter from your lender around 3 months before your current mortgage deal ends offering you alternative products that have a cheaper mortgage rate of interest than the lender’s standard variable rate (SVR).
If you don’t switch in time, you will automatically move onto your lender’s standard variable mortgage rate. However, you still have the right to make the switch to a new product, be that to a new lender or your existing lender, without any early repayment charges.
With mortgage interest rates currently rising at the fastest rate for decades it is very important you get the very best interest rate you can whether this happens to be with your current lender or by moving to a new mortgage lender. It has been our expert observation that people panic as it can feel overwhelming!
This is where YesCanDo can come to the rescue. We do it all for you. We compare the deals open to you with your current lender and compare them to the whole mortgage market.
Our experienced mortgage advisors will get you the very best mortgage rate. Complete ALL the paperwork and see the whole process through to completion. Better all we will not charge you a penny as we get paid by the mortgage lenders.
The product transfer process with your existing lender
A product transfer mortgage is the most convenient way to get a new mortgage as the process is fairly simple. When you have reviewed the remortgage deals your mortgage lender is offering, you simply choose the deal that is right for you and sign to accept it.
In the majority of cases, you won’t need to go through another affordability assessment and your credit file won’t be checked by your lender. This is because you already have a loan with them so they will have some understanding of your financial position without needing to carry out additional checks.
Still, before you agree to this option, you need to consider whether this is the right option for you. Remortgaging to another lender could be your best course of action so before you come to a decision, the following steps are advised.
Step 1. Get a valuation of your property
To get a valuation of your property, you can either pay a surveyor to do it for you or check with your local estate agents to find out how much similar properties cost on the market.
It’s worth paying for a surveyor if you have made any renovations to your property. This is because your house will likely be higher in value than those houses where renovations haven’t been made, so this is the best way to find out how much your house is worth.
Your existing mortgage lender will carry out their own valuation too but they will base it on general price rises in your area and not the renovations that are unique to your property. As such, they could undervalue your home when calculating the loan amount they are willing to offer you.
Step 2. Work out the amount of equity you have
After you have completed the property valuation, you will be able to work out the amount of equity you have in your home.
Your home’s equity is the value of your property less the amount you owe on your mortgage. The higher the equity, the lower the loan-to-value (LTV) of your property. These figures can determine what deals lenders will offer you, with the most attractive deals going to customers with a lot of equity in their property and the smallest LTV percentage.
Step 3. Speak to a mortgage broker
After finding out how much equity you own and what your LTV is, a mortgage broker will be able to compare mortgage deals on your behalf. They will compare these to the deals that are being offered by your current mortgage lender and they will let you know which lender can give you the better deal.
It’s worth noting that other factors can affect the deals you will be offered, such as your credit history, affordability, and the various other aspects that make up the lender’s criteria. A mortgage broker will take all of these things into account when helping you choose the most appropriate mortgage option.
If sticking with the same lender is the sensible next step, this will be the mortgage advice given to you. But if your borrowing costs will be lower elsewhere, you will usually be advised to make the switch to another lender if you can save money by doing so.
Switching lenders is advised if you can get a better deal elsewhere but if your lender offers you a deal with favourable terms and affordable rates, you might want to take up their mortgage offer. A mortgage adviser can give you further advice so get in touch with our expert team to learn more.
To learn more, get in touch with an online mortgage advisor at YesCanDo Money today.
What is the difference between product transfer and remortgage?
A product transfer mortgage is essentially the same as a remortgage as you are switching to a different mortgage rate and deal. However, you are restricted to your current lender’s product range if you decide on a product transfer whereas remortgaging to another lender could give you access to a potentially better deal.
To help you understand whether a mortgage product transfer is right for you or not, we have outlined some of the main advantages and disadvantages when compared to a remortgage with a different lender.
Advantages of a product transfer
Below we have listed a hand full of the main advantages of a mortgage product transfer.
- A speedier process
- Less paperwork to worry about
- Fewer mortgage fees (or no fees in some cases)
- No credit check (in most cases)
- No affordability check (in most cases)
- No legal costs
Disadvantages of a mortgage product transfer
Below we have listed a hand full of disadvantages to consider when thinking of a mortgage product transfer.
- Fewer remortgage options
- Rates aren’t based on your LTV or equity (so you may miss out on the preferable rates that are offered to new customers)
- You can’t extend your loan
- You cant borrow extra to pay off debts
- You can’t add or remove people from the mortgage
- There may be hidden charges
Should I stay with the same lender or consider switching to another lender for a mortgage deal?
A mortgage product transfer could be right for you if your financial circumstances have changed for the worse since you last took out a mortgage. This is because your options may be restricted if you choose to remortgage to another lender as they may offer you less competitive deals due to the change in your finances.
In this situation, staying with your existing mortgage lender could be the right thing to do. This is especially true if they can offer you a fixed-rate deal that protects you from future interest-rate rises. This is also the option with the least amount of hassle as your current bank or building society will require less paperwork from you.
But if your monthly payments will be significantly reduced with a fixed-rate mortgage from another bank or building society mortgage, perhaps because you have built up enough equity in your home to obtain a more competitive deal, then making the switch can be advised.
So, what should you do? We recommend that you get in touch with a remortgage advisor at YesCanDo if you require further advice. Our specialist brokers will provide mortgage advice based on your financial circumstances and will search the entire market to compare your lender’s mortgage product with the other deals available.
Mortgage lenders’ product transfer eligibility requirements
You will usually be eligible for a mortgage product transfer if…
- There are no arrears on your current loan
- You are in full-time employment
- You will be under 70 when the new loan expires
If you have a standard residential mortgage, there will usually be no need for extra checks from the lender. But if you have a non-standard mortgage, perhaps because you are self-employed, an older borrower, or a buy-to-let property owner, you may be subjected to extra checks, such as an affordability assessment.
| Mortgage Lender | Product Transfer Conditions | Earliest Available Product Transfer |
|---|---|---|
| Halifax | Halifax product transfers are allowed before or after a current deal expires | 4 months before your current deal ends |
| TSB/Lloyds | TSB/ Lloyds product transfers areavailable, however they cannot be done online | 3 months before your current deal ends |
| Nationwide | Nationwide product transfers are available through brokers or their own in-house advisors | 6 months before your current deal ends |
| Santander | Santander product transfers are available | 4 months before your current deal ends |
| Accord | Accord offers product transfers direct or via a mortgage broker | 3 months before your current deal ends |
| Natwest | Natwest product transfers are available via in-house advisors for transfers | 6 months before your current deal ends |
| Birmingham Midshires | Birmingham Midshires also know as BM Solutions offer product but only via a mortgage broker. | 3 months before your current deal ends |
| HSB | HSB offer product transfers direct or via a broker/advisor. | 3 months before your current deal ends |
| Barclays | Barclays offers exclusive product transfer rates to existing customers | 180 days before your current deal ends |
| Virgin Money | Virgin Money offer mortgage product transfers via a broker or direct | 4 months before your current deal ends |
Mortgage advice on product transfers
If your mortgage fixed rate is coming to an end or if you are on your lender’s SVR, then a mortgage product transfer or a remortgage with another mortgage provider can be advised.
Product transfers are faster to arrange than remortgages to new lenders and they work out cheaper than your lender’s SVR. Legal fees can be avoided and in most cases, credit checks are not needed. But as advantageous as a mortgage product transfer can be, you may not end up with the best deal. This is because the equity in your home will not be taken into account so even if you do get a new property valuation, you won’t necessarily benefit from the preferable rates that your lender offers to new customers.
If you remortgage to a new lender, the process will be longer because of all of the paperwork and checks that are involved. This will include an assessment of your approximate annual income. But provided your financial circumstances haven’t changed for the worse, you may be able to obtain a mortgage that is more affordable than what your current lender can offer you.
Jane's Mortgage Product Transfer Experience
The mortgage broker assessed Jane's financial situation, property valuation, and the equity in her home. After comparing the deals offered by her current lender and those available in the market, they concluded that a mortgage product transfer would be the best option for Jane.
By opting for a product transfer, Jane was able to secure a lower interest rate and reduced monthly repayments, without undergoing extensive credit checks or affordability assessments. The process was simple, fast, and saved Jane both time and money. In Jane's case, sticking with her current lender through a mortgage product transfer proved to be the best choice, showcasing the importance of consulting an expert to find the most suitable option.
Conclusion: Our mortgage advisors advice
Below we have listed a few takeaway points for you to think about when considering completing a mortgage product transfer.
Shop around for a new mortgage deal before agreeing to a transfer deal with your current lender
This is because existing customers are sometimes ruled out of the best deals so you shouldn’t accept your lender’s offer until you know what other product transfer mortgages are available.
Search the market with the help of a mortgage broker
Mortgage brokers have access to deals that can’t be found on the high street, including those offered by niche lenders who may offer more competitive deals. Get in touch with our broker matching service to see if we can reduce monthly repayments on your mortgage.
Follow your mortgage broker’s advice
Your online mortgage advisor at YesCanDo will assess your situation, compare all of the deals on the market, and advise you on the best way forwards. To benefit from the lowest mortgage repayments talk to a mortgage advisor from our team.
Get in touch with our expert mortgage team
To learn more about what we can do for you, get in touch with us today for impartial advice and a no-obligation chat. If you decide to use our services when looking for a new deal, your remortgage expert mortgage adviser will give you the mortgage advice you need to help you make the very best decision.
Related reading: Loan or Remortgage: What should I get?
FAQs
How long does a product transfer take?
Mortgage product transfers don’t take very long at all. In some cases, they can be completed within as little as 24 hours, which is far shorter than a remortgage to a different lender which can take between 4-8 weeks or even longer.
How early can you apply for a product transfer?
Product transfers can usually be reserved around 4-6 months before an existing deal ends. This will depend on your lender, however, as they may have different guidelines.
When your mortgage term is up, you will then move on to your new mortgage deal instead of falling onto your lender’s SVR.
If you want to transfer to a new product earlier, this may be possible, but you may have to pay the early repayment fees set by your lender. Check with your lender to find out more details.
Do product transfers involve a credit check?
As you are staying with your existing lender, there will be no need for them to check your credit file. This is because they will already have an understanding of your ability to make your mortgage payments so they won’t need to make any checks to assess the risk in lending to you.
If you decide to remortgage to a new mortgage lender, you will be subjected to their credit checks as part of their assessments. If your credit score has improved since you last took out a mortgage, you may be eligible for more affordable mortgage products. But if your score is lower than it was, you may be ruled out of the best deals and you might even find it difficult to get a mortgage approved. With few mortgage providers lending to customers with a bad credit history, it’s advisable to improve your credit rating before you apply for a mortgage with another lender.
Can I do a product transfer if I used Help to Buy?
Yes! If you took out your original mortgage through the Help to Buy Scheme, your equity loan will remain in place when you move onto your new mortgage agreement. Please note that as of October 2022 the help-to-buy scheme has closed to new customers.
