What Is a Product Transfer?
A product transfer means moving to a new mortgage deal with your existing lender without remortgaging to a different provider. Your lender will typically contact you before your current deal ends with a list of their available products. You choose a new rate and term, sign the paperwork, and your new deal starts — often without a new valuation, affordability assessment, or legal work.
Product transfers are appealing because of their simplicity. There's minimal paperwork, no conveyancing, and the process can complete in as little as a week or two. For many borrowers, particularly those with complex financial situations, this convenience is a genuine advantage.
Advantages of Staying with Your Current Lender
Product transfers offer several benefits:
- Speed and simplicity: Far less paperwork and no legal process
- No valuation needed: Avoids the risk of a down valuation
- Fewer eligibility hurdles: Your lender is less likely to reassess your full affordability
- No cost: Product transfers typically have no legal fees or valuation charges
- Certainty: If your circumstances have changed (reduced income, increased debts), a product transfer avoids a fresh affordability assessment
If you wouldn't pass a new lender's affordability checks — for example, if your income has decreased since you took out the original mortgage — a product transfer may be your most practical option.
Why Switching Lenders Could Save You More
The main drawback of a product transfer is that you're limited to one lender's products. The wider market may offer lower rates, better terms, or more suitable features. Even a small rate difference — say 0.1% to 0.2% — can add up to hundreds or thousands of pounds over a two or five-year term.
Switching to a new lender also gives you the opportunity to restructure your mortgage. You might shorten the term to pay off the debt faster, extend it to reduce monthly payments, or release equity for home improvements. Product transfers are often more restrictive in what changes they allow.
How to Decide What's Best
The right approach is to compare. Get your current lender's product transfer options and then check what the wider market offers, either by using comparison tools or consulting a mortgage broker. Compare the total cost of each option, not just the headline rate — factor in any arrangement fees, legal costs, and valuation charges.
If the savings from switching outweigh the costs and hassle, it makes financial sense to go with a new lender. If the difference is marginal, the convenience and speed of a product transfer may tip the balance in favour of staying put. A mortgage broker can run the numbers for you and make a clear recommendation.
Important: Your home may be repossessed if you do not keep up repayments on your mortgage. There will be a fee for mortgage advice. The actual rate available will depend on your circumstances. Think carefully before securing other debts against your home.