Product Transfer Mortgages

What is a Product Transfer Mortgage?

A mortgage product transfer is a type of remortgage where you switch to a new deal with your existing lender rather than moving to another one. Homeowners do this when their current mortgage deal is nearing its end because, if you don’t, then the loan will revert to the lender’s standard variable rate (SVR), implying higher monthly repayments.Therefore, you’ll save money and keep your mortgage payments more manageable if you get a better deal before this happens. As for forward thinking, lenders will let you arrange a new deal 3 to 6 months in advance, giving you time to lock in a competitive rate before your current term is up.

How do Product Transfer Mortgages Work?

If you meet the eligibility criteria and aren’t looking to borrow additional funds, the process of a product transfer is typically straightforward. In fact, you can get a new deal with your existing lender in just a few days.Since there’s no need for a property valuation or extensive affordability checks like when you first got your mortgage, the transfer won’t mean much hassle on your part. This makes it a good option if you want a smoother, quicker way to adjust your mortgage terms.

Why Choose a Product Transfer Mortgage Over Switching Lenders?

Opting for a product transfer instead of moving to another lender opens you up to several advantages:

• Unlike switching lenders, a product transfer usually doesn’t require a new credit check (ideal if your financial situation has changed).
• The process won’t have much paperwork, so this reduces the amount of documentation you need to complete.
• Most product transfers don’t involve a full property valuation, which further works to speed up the process.
• Staying with your current lender means avoiding costly exit fees (early repayment charges) that can come with switching providers.
• There’s little to no legal work involved, meaning you can bypass solicitor fees and such charges.

What are the Drawbacks of a Product Transfer Compared to Remortgaging?

Though product transfer represent a great deal of convenience, there are some potential disadvantages:

• Sticking with your current lender limits your choice to their product range, meaning you could miss out on more competitive deals elsewhere.
• Without comparing offers from other lenders, you might not get the best mortgage rate available on the wider market.
• Your current lender is biased, and so won’t highlight better remortgaging options from competitors.
• If your circumstances have changed, such as a reduced income or credit score, your lender could reject your transfer request, leaving you with fewer alternatives.
• Being turned down for a product transfer without a backup plan could result in being placed on your lender’s SVR, leading to higher repayments.

Can I Borrow More When Transferring my Mortgage?

You can borrow additional funds during a mortgage product transfer through what’s known as a further advance. This is where you take out extra borrowing against your property, which can then be used to fund home improvements, for example, thereby increasing your property’s value.

How Will My Affordability Be Tested If I Want to Borrow More?

Getting a further advance isn’t as simple as a standard product transfer since your lender will need to assess your financial situation in greater detail. Specifically:

• Changes in your income and employment status will have an impact upon your eligibility.
• The amount of equity you’ve got in your home will factor into how much extra you can borrow.
• If you don’t have a strong credit score, then this will make borrowing more difficult.
• Lenders will look at your mortgage repayment history to see if you’ve been keeping on track.

Should I Get a Product Transfer or Remortgage?

Deciding between a mortgage product transfer and a remortgage with a new lender depends entirely on your personal financial situation and long-term goals. To make an informed choice, it’s important to weigh up your options carefully and seek professional guidance where needed.With our intuitive online platform, you can effortlessly compare a vast selection of remortgage deals tailored to the UK market. Updated daily, it provides access to thousands of competitive offers, ensuring you stay informed about the best rates available.Once you’ve identified a deal that suits your needs, our team of expert advisors is on hand to offer personalised support. We take the time to understand your financial circumstances and goals, guiding you towards the most suitable option – whether that’s a simple product transfer or a full remortgage.If you’re unsure which route to take or have any concerns, don’t hesitate to reach out. Our goal is to simplify the process, eliminate confusion, and help you secure a mortgage deal that aligns with your financial future.