Our guide to mortgage product transfers
If you are unsure if you should switch to a new mortgage product with your existing lender or need more information on how to do it then our expert mortgage brokers are here to help you.
They can explain the choices you have and also confirm whether there is a better or cheaper alternative.
What is a Mortgage Product Transfer?
When your current mortgage rate comes to an end, your loan will revert to the lender’s Standard Variable Rate (SVR), which is usually higher than the interest rate you will have been paying. Your monthly payments will change to reflect the new interest rate.
Your lender will normally contact you 3-6 months before your rate is due to expire to offer you a choice of new rates.
We will investigate the options available from your current lender and compare those available from other lenders. A Product/Mortgage Transfer is simply swapping to a new product with the same lender.
For example: You are coming to the end of a variable tracker rate and want to choose a new fixed rate to help with monthly budgeting, with no other changes to your mortgage arrangement.
This is known as a product transfer as you are simply moving from one product (the tracker rate) to a new product (the fixed rate).
What does product transfer mean?
This can be thought of as a remortgage with the same lender.
As explained above, a mortgage transfer means transferring to a new mortgage deal with your current mortgage lender. The loan amount and mortgage term are generally not altered.
Is it the same as porting a mortgage product?
No. Porting is when you want to move house but also want to move (or port) your current mortgage deal over to the new property.
This avoids early repayment charges (ERC) and is useful if you have a great deal and don’t want to lose it.
Why remortgage with the same lender?
There are a few reasons why this is a popular choice:
- It’s quick. Just confirm the new deal you would like and the product transfer will be completed in a matter of days
- It’s cheap. There’s either no fees or low fees.
- It doesn’t usually involve credit or income checks. So if your circumstances have changed since first applying this can be helpful
Do you need a deposit to remortgage?
Lenders don’t expect you to pay a deposit when remortgaging, they utilise your equity instead.
However, there could be some circumstances where an additional cash deposit enables you to get a better interest rate via the lower LTV.
STICK
Stick with the standard variable rate (SVR) once your current deal ends.
This is likely to be higher than the product rate that is ending. However, if you are planning to reduce or pay off your mortgage in the near future, or possibly remortgage to a new lender, this might be the best option and avoids early repayment charges.
SWITCH
Switch to a new product.
Stay with your current lender and transfer to a new mortgage product.
Great if you have no plans to change your mortgage or move in the near future.
REMORTGAGE
Move your mortgage to a new lender.
Not all lenders offer attractive products to switch to.
Maybe you need to borrow some more money but your current mortgage company won’t oblige.
THE NEXT STEPS
If you would like to have a chat about product transfers and switching your existing mortgage then please get in touch.
Our brokers can talk over the options available and we can help with the paperwork.
- About the Author
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Sean Horton is a co-owner of Drake Mortgages and has worked in financial services, mortgages and insurance since 1988. Previously a financial adviser and a mortgage broker, he regularly writes about mortgages, bridging loans and commercial finance.
