When you’ve reached the end of your rate, should you remortgage or consider a product transfer? Here, we compare the options to help you decide which is best for you.
If you’re approaching the end of your fixed-rate mortgage, then you’ll already be considering your next deal. However, choosing between a remortgage and a product transfer isn’t always simple.
What’s the difference between a remortgage and a product transfer?
A remortgage is when you take out a new loan with a different lender at a new interest rate. As this is a new lender, you’ll typically need to undergo valuations and lender affordability checks before being accepted, which can incur additional costs. The process can take around 4-8 weeks.
A product transfer is when you switch to a new rate with your current lender. Lenders typically offer a set of product transfer rates for you to choose from, but these rates may not be as competitive. This process is very simple, as your lender will already have all your details and the property information. Our brokers can assist you with this process, which can be completed in as little as a few days or a few weeks.
Should I choose a remortgage or a product transfer?
Here’s a simple comparison which shows the benefits and the drawbacks of both remortgages and product transfers:
| Remortgage | Product Transfer | |
|---|---|---|
| Best rates |
Whole-of-market access ensures you secure the |
Limited to your lender’s product transfer rates, which may not be the most competitive. |
| Costs |
Valuation, legal and arrangement fees may apply. However, some lenders offer fee-free incentives. |
Typically, there are no valuation or legal fees and minimal or no admin charges. |
| Time to complete |
Typically, 4 and 8 weeks due to legal work and property checks. |
Often as little as a few days or up to 2 weeks. |
| Administration |
More paperwork is involved due to the application, affordability checks and any legal processes. |
Minimal administration is required and is often as simple as a single button click. |
| Flexibility |
Explore all rate options, extend your mortgage term or raise capital. |
Restricted to your existing lender’s products and limited options to change your term or raise capital. |
How do I find the best mortgage rate for me?
Your individual circumstances will determine whether a remortgage or product transfer is right for you. The best step to take is to speak to one of our experts.
With our whole-of-market access, we’ll search all available rates to find the most cost-effective option for you, whether that’s with your existing lender or a new one. Often, we have access to products which borrowers cannot apply for directly.
You can start searching for your next mortgage with our FREE online calculator here.
Why should I use a broker?
Using a broker means you’ll have expert support from start to finish. We’ll submit your mortgage application on your behalf, allowing you to focus on the excitement of moving home rather than the paperwork. We’ll also answer all your questions along the way.
To discuss your home move mortgage options or to ask us a question, get in touch on 0345 345 6788 or submit an enquiry here.
