Product Transfer Mortgages
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We’ll explain what a product transfer mortgage is, how they differ from remortgages and why speaking with a mortgage broker first is a smart move before you make any final decisions.
What is a product transfer mortgage and how do they work?
A product transfer mortgage is when you change mortgage deals with your current lender rather than remortgaging with a different provider. Product transfers don’t usually involve a full valuation of the property if the amount borrowed is unchanged, and this means that they can be very quick to complete.
If you’re refinancing with your current mortgage lender to borrow more, this would be classed as a specific type of product transfer known as a further advance. These agreements usually involve more eligibility assessments, a valuation and legal red tape.
Although product transfers can be relatively quick, taking your lender up on one without checking whether there’s a better interest rate deal elsewhere is not recommended. Speaking to a mortgage broker who has access to the entire market before you commit to a deal is strongly advised.
How are they different to remortgages?
They aren’t really any different, except a product transfer is a remortgage specifically with your current lender. Used generally, the term ‘remortgage’ can refer to refinancing with either your current lender or another one, but it wouldn’t be a product transfer if you were switching lenders.
In terms of the process involved, remortgaging with another lender can take longer than a product transfer and there may be extra steps to complete, especially if you’re borrowing extra. But with a product transfer, you’re limited to just one set of mortgage deals.
Work out your new mortgage payments
Use the product transfer calculator below to work out what your new mortgage payments and LTV will be after you’ve refinanced.
Product Transfer Mortgage Calculator
This calculator can tell you what your new loan-to-value (LTV) ratio and repayments will be after you've completed your product transfer, with or without releasing equity from your property.
After you have remortgaged your new LTV ratio will be and your new mortgage payments will be as indicated below…
New Monthly Repayments:
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Mortgage product transfer vs remortgaging
The table below shows the advantages and disadvantages of a product transfer versus remortgaging with another mortgage lender…
Product transfers usually involve less work for the borrower
There’s less paperwork to fill out
A full valuation might not be needed
Borrowers usually exempt from legal fees
Getting the best deal is less likely as you’re limited to one lender’s product range
Your lender won’t offer impartial, independent advice about your remortgage options
You might find it more difficult to get approved if your circumstances have changed
Being declined for a remortgage could be more costly without a broker to fall back on
In summary, the main benefit of agreeing to a product transfer over a remortgage is that it can be quicker to complete. Although you might also pay out less in upfront fees, keep in mind that you could end up out of pocket overall if you lock yourself into a deal with your current mortgage lender without checking whether there is a better one available elsewhere.
Can you borrow more when transferring a mortgage?
Yes, you can. A product transfer is essentially the same as a remortgage, so if you’d like to release some equity during the process – perhaps for home renovations or to consolidate other debts – then you can apply to do that at the same time.
How will your affordability be tested if you want to borrow more?
If you want to borrow more money your mortgage lender will want to know the following:
- How much you’re looking to borrow and why
- What your overall loan-to-value (LTV) will be
- Your current annual salary / monthly outgoings
- Credit record
Once they review this information they will check your requirements versus their eligibility and affordability criteria. From an affordability perspective, most lenders work on an income multiple typically of 4-4.5 times annual income. So, if the additional amount you want to borrow doesn’t move the overall mortgage outside these parameters – and other eligibility factors are fine – then the application has a strong chance of being approved.
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The benefits of considering another lender (switching)
Taking your mortgage lender up on a product transfer without checking what other remortgage deals are out there is not recommended. It’s strongly advised that you speak to a mortgage broker and ask them to search the entire market for you to see what’s on offer.
If you talk to a mortgage broker before settling on a remortgage option, this will open an entire market of products up to you. If the rates your current lender is offering really are the best available, your broker is obliged to tell you this and advise you to stick with that mortgage provider.
Using our free mortgage broker-matching service you can speak straight away to the right broker by simply making an enquiry online. They’ll be able to help with:
- Downloading and optimising your credit reports giving you a better chance of approval with another mortgage lender offering better rates
- Preparing any necessary paperwork making the application process seamless
- Finding the right mortgage lenders offering the best remortgage rates available across the whole market
Not having ‘proof’ of my new salary was a massive roadblock and one I did not expect.
But thankfully, I discovered Online Mortgage Advisor! I filled in their form and desperately hoped they could match me to a broker that was able to help me. It felt like my last chance.
Conditions which mortgage lenders place on product transfers
Some mortgage lenders apply specific terms, conditions and caveats to their product transfers, and we’ve rounded up some examples of what you might encounter in the table below.
|Mortgage Lender||Product Transfer Conditions|
|Halifax||Allow product transfers before or after a current deal expires|
|TSB/Lloyds||Transfers available, but they cannot be done online|
|Nationwide||Transfers available through brokers or their own in-house advisors|
|Santander||Can transfer within four months of current deal coming to an end|
|Accord||Can only transfer when current deal has ended|
|Natwest||Uses in-house advisors for transfers|
|Birmingham Midshires||No fees on product transfers|
|Aldermore||No new credit or affordability checks|
|Yorkshire Building Society||Lets customers reserve a new deal for up to 120 days|
|Barclays||Offers exclusive rates to existing customers|
(All of the above information is correct at the time of writing. Mortgage lending criteria can be subject to change at any time at the lender’s discretion.)
As you can see, some of the above lenders do offer perks to existing customers, but even with that factored in, there’s no guarantee it’s the very best deal for you.
Key takeaways from this guide
Check the whole market before agreeing to a product transferThere’s no guarantee that the remortgage deal your current lender is offering is the best one on the market, so be sure to shop around before agreeing to a product transfer with them.
Using a broker is the best way to search the market:Any mortgage broker worth their salt has whole-of-market access, which means that they can give you access to every remortgage deal you qualify for, including ones with niche lenders you’ve never heard of and exclusive mortgage products that can only be accessed through a broker.
We can match you with your ideal broker:There are brokers who specialise in remortgages and their knowledge and expertise is the key to getting the best deal. We offer a free broker-matching service that can pair you with a remortgage advisor based on their track record helping customers just like you save money while refinancing.
Not always. If the lender is confident that your circumstances are unchanged, some will forgo credit checks on a straightforward product transfer. But if you were to inform them that there have been significant changes to your credit report, they might assess you again.
If you are applying for a product transfer to borrow more money on your mortgage, the chances of the mortgage lender checking your credit file are higher.
Yes. It’s possible to carry out a product transfer if you took out your original mortgage through the Help to Buy scheme.
Help to Buy remortgages, whether that’s a product transfer with your current mortgage lender or a refinancing deal with a new one, aren’t really any different to standard remortgages. Your equity loan will remain in place when the new mortgage agreement begins.
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