Product Transfer Mortgages

What Is a Product Transfer?

A product transfer, sometimes known as a rate switch, is when you move onto a new mortgage deal with your existing lender rather than remortgaging to a new one. Typically, the mortgage remains on a similar basis, with no significant changes to the borrowing or original application.

For many homeowners, landlords and property investors, a product transfer can be a quick and cost-effective way to secure a new mortgage rate before an existing fixed or tracker deal comes to an end.

At Mortgage Finance Brokers (MFB), we compare both product transfer and remortgage options to help ensure you're making the most appropriate decision for your circumstances.

Product Transfer vs Remortgage

One of the most common questions borrowers ask is whether they should complete a product transfer or move to a new lender through a remortgage.

Product Transfer Benefits:

• Quick and straightforward process
• Usually no legal fees
• Usually no valuation fees
• Less administration
• Can often complete in days rather than weeks
• May be suitable when affordability has changed

Potential drawbacks:

• Limited to your current lender's products
• May not provide the most competitive rate available
• Usually unsuitable for capital raising
• Less flexibility than a full remortgage

Remortgage Benefits:

• Access to lenders across the market
• Potentially lower rates
• Ability to raise capital
• More flexibility with product features
• Opportunity to review your overall mortgage strategy

Potential drawbacks:

• More paperwork
• Legal and valuation costs may apply
• Affordability assessments are usually required
• Typically takes longer to complete

The right option depends on your objectives, mortgage balance, property type and future plans. 

Benefits of a Product Transfer

Save Time

Many product transfers can be completed within a few days, making them ideal for borrowers approaching the end of a mortgage deal.

Avoid Standard Variable Rates

One of the biggest reasons borrowers consider a product transfer is to avoid reverting onto a lender's Standard Variable Rate (SVR), which can be significantly more expensive.

Lower Costs

Unlike many remortgages, product transfers often involve:

• No legal fees
• No valuation fees
• Minimal administration costs

This can make them an attractive refinancing option.

Greater Certainty

Many lenders allow borrowers to secure a new rate months before their current deal ends, helping protect against future interest rate increases. 

Residential Product Transfers

For homeowners, a product transfer can be an effective way to remain with a lender you're happy with while securing a new mortgage rate before your existing deal expires.

This can be particularly useful if:

• Your circumstances have changed
• You want to avoid a lengthy mortgage application
• You need a quick refinance solution
• You're happy with your current lender

However, it's still important to compare your lender's rates against the wider market before making a decision. Read our home remortgage guide if you need to consider other options.

Buy-to-Let Product Transfers

Product transfers have become increasingly popular among landlords.

In recent years, tighter affordability calculations and changing lending criteria have made refinancing more challenging for some investors. A product transfer can provide a simple way of securing a new deal without the complexity of a full remortgage process.

However, landlords should always compare:

• Product transfer rates
• Remortgage rates
• Associated costs
• Future investment plans

to ensure they are securing the most cost-effective outcome. Read our buy to let remortgage guide for a comparison.

Commercial Product Transfers

Commercial product transfers have become increasingly common, particularly among borrowers using specialist lenders and challenger banks.

Benefits can include:

• No legal fees
• No valuation fees
• Faster completion times
• Reduced administration

Given the complexity of commercial finance, many lenders require commercial product transfers to be arranged through an intermediary, making specialist advice particularly valuable.

Should You Use A Broker For A Product Transfer?

Many borrowers assume they should simply contact their lender directly.

However, there are significant benefits to working with a broker.

Independent Advice

A broker can compare both remortgage and product transfer options to ensure you're considering all available routes.

Market Knowledge

The cheapest rate isn't always the most suitable option. Brokers can help assess:

• Product features
• Fees
• Incentives
• Flexibility
• Long-term costs

Ongoing Monitoring

If rates improve before completion, many lenders allow applications to be switched to better products. A broker can monitor the market and manage this process on your behalf.

Less Administration

From lender communications to product comparisons, a broker handles much of the work for you, helping reduce the administrative burden.

When Should You Arrange A Product Transfer?

Most lenders allow product transfers to be arranged between two and six months before an existing deal expires.

Starting early can help you:

• Lock in available rates
• Avoid SVR exposure
• Compare alternative remortgage options
• Plan your finances with confidence