Product Transfer vs Remortgage
Should You Switch Mortgage Deals or Move to a New Lender?
A product transfer means switching to a different mortgage deal with your existing lender, while a remortgage usually involves replacing your current mortgage with a new mortgage from a different lender.
Both can be ways of changing your mortgage deal, but the process, costs and legal work involved can be very different.
Understanding the difference can help you decide which route to explore and whether conveyancing is likely to be required.
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What Is the Difference Between a Product Transfer and a Remortgage?
The main difference is whether you stay with your existing mortgage lender or move to a new one.
With a product transfer, you normally remain with the same lender but switch from your current mortgage deal to another product offered by that lender.
With a remortgage, you usually take out a new mortgage with a different lender. The new mortgage is used to repay your existing mortgage, and the new lender’s charge is registered against the property.
This distinction is important from a conveyancing perspective because a straightforward product transfer will not normally require the same legal work as a remortgage to a different lender.
Our Remortgage Conveyancing section explains the legal work involved when changing your mortgage.
Product Transfer vs Remortgage at a Glance
The key differences between a product transfer and remortgage are set out below.
Product Transfer |
Remortgage |
|
|---|---|---|
|
Mortgage Lender |
You stay with your existing lender |
You normally move to a different lender |
|
Mortgage Product |
You switch to another deal offered by the same lender |
You choose a mortgage offered by another lender |
|
Conveyancing |
Usually little or no conveyancing for a straightforward switch |
Conveyancing will normally be required |
|
Property Title |
Existing lender’s legal charge normally remains |
Existing lender’s charge is repaid and the new lender’s charge registered |
|
Mortgage Application |
The process may be simpler, depending on the lender and circumstances |
A new mortgage application and lender assessment will normally be required |
|
Property Valuation |
May not always be required |
The new lender will normally need to establish the property’s value |
|
Legal Costs |
Usually no separate conveyancing cost for a straightforward product transfer |
Conveyancing fees and other legal costs may apply |
|
Choice of Deals |
Limited to products offered by your current lender |
Allows you to consider products from other lenders |
|
Timescale |
Often quicker |
A straightforward remortgage commonly takes around 4–8 weeks |
The right option will depend on your mortgage, financial circumstances and the products available to you.
What Is a Mortgage Product Transfer?
A product transfer is when you switch from one mortgage product to another with the same mortgage lender.
For example, you might be approaching the end of a fixed-rate mortgage and choose another fixed-rate deal offered by your existing lender.
Because the lender is not changing, the existing mortgage charge against the property will normally remain in place.
This means there is usually no need to repay one lender and register a completely new mortgage for another lender.
As a result, the process can be considerably simpler than remortgaging to a different lender.
What Is a Remortgage?
A remortgage usually involves replacing your existing mortgage with a new mortgage, often from a different lender.
The new lender will assess your mortgage application and, if approved, issue a mortgage offer.
Conveyancing is normally required because your existing lender’s mortgage needs to be repaid and its charge dealt with, while the new lender needs to be satisfied with the property’s legal title before its new mortgage is registered.
Your conveyancer coordinates these legal arrangements and deals with the mortgage funds on completion.
Do You Need a Conveyancer for a Product Transfer?
Usually not for a straightforward product transfer where you remain with the same lender and there is no change to the legal ownership of the property.
The existing lender’s legal charge normally remains registered against the property, so there is no new lender requiring a conveyancer to investigate the title and register a replacement mortgage.
However, the position can change if something else is happening at the same time.
For example, legal work may be required if you’re:
- Adding someone to the property title
- Removing an existing owner
- Changing the legal ownership arrangements
The lender may also have its own requirements depending on the proposed changes.
Learn More: Do You Need a Solicitor to Remortgage? →
Do You Need a Conveyancer When Remortgaging to a New Lender?
Normally, yes.
When you move your mortgage to a different lender, the new lender is taking a legal charge over your property.
It will therefore normally require legal work to confirm that its security over the property is acceptable.
Your conveyancer will typically:
- Check the property’s legal title
- Deal with the new lender’s requirements
- Obtain information about the existing mortgage
- Arrange repayment of the existing lender
- Deal with the new mortgage funds
- Complete the remortgage
- Register the new lender’s mortgage with HM Land Registry
In many cases, the same conveyancer can act for both you and the new mortgage lender, provided the firm is able to act for that lender.
Is a Product Transfer Quicker Than a Remortgage?
Generally, yes.
A straightforward product transfer can be considerably quicker because you’re remaining with your existing lender and the same legal charge can normally stay in place.
There is usually much less legal work involved and, depending on the lender and circumstances, the mortgage assessment may also be more straightforward.
A remortgage to a different lender involves a new mortgage application together with the legal work required to replace the existing mortgage.
A straightforward remortgage will commonly take around 4–8 weeks, although the actual timescale depends on the lender, property and circumstances.
Is a Product Transfer Cheaper Than Remortgaging?
It can be cheaper in terms of the immediate costs of changing your mortgage.
A straightforward product transfer usually doesn’t involve separate conveyancing fees because the mortgage lender and registered mortgage charge are not changing.
Some lenders offer remortgage products that include incentives such as a contribution towards legal work, so the direct cost to the borrower can vary.
However, the cheapest process isn’t necessarily the cheapest mortgage overall.
The interest rate, mortgage payments, product fees, early repayment charges and other mortgage terms can have a much greater financial effect than the conveyancing cost alone.
Does a Product Transfer Require a Property Valuation?
Not always.
Because you are already a customer of the lender, it may use an existing, automated or updated valuation when deciding which mortgage products are available.
The lender may require a new valuation in some circumstances.
When remortgaging to a different lender, the new lender will normally need to establish the value of the property as part of assessing the mortgage.
How it does this will depend on the lender, property and mortgage application.
A valuation for mortgage purposes is primarily carried out for the lender’s benefit and should not be confused with a detailed property survey.
Do You Have to Pass Affordability Checks for a Product Transfer?
The lender’s requirements will depend on the circumstances and the changes being made.
A straightforward switch between mortgage products with the same lender can involve a different assessment from applying for a completely new mortgage with another lender.
However, additional borrowing, changing the borrowers or making other significant changes can result in further affordability or eligibility checks.
A remortgage to a different lender will normally involve a new mortgage application and assessment against that lender’s lending criteria.
For questions about which mortgage product is suitable for your circumstances, you should speak to your lender or an appropriately authorised mortgage adviser.
What if You Want to Add or Remove Someone When Changing Your Mortgage?
Changing the people who own the property or are responsible for the mortgage is different from simply switching mortgage products.
For example, you might want to:
- Add a partner to the property and mortgage
- Remove a former partner following a separation
- Change from sole to joint ownership
These changes can involve a transfer of equity and additional conveyancing work.
The mortgage lender will normally need to approve changes affecting the borrowers or legal owners.
Our Remortgaging With a Transfer of Equity guide explains how a change of ownership can be dealt with alongside a new mortgage.
Can You Product Transfer if Your Property Is Leasehold?
Being leasehold does not automatically prevent a product transfer.
For a straightforward switch with the same lender, there may be little or no conveyancing involved.
A remortgage to a new lender is different because the new lender and conveyancer may need to consider the lease and other information affecting the property.
Issues such as the remaining lease term, restrictions within the lease or other title matters can potentially affect whether the property meets the new lender’s requirements.
Can You Product Transfer if Your Circumstances Have Changed?
Potentially.
One reason some borrowers consider a product transfer is that the process may be different from making a new mortgage application with another lender.
However, whether a particular product is available will depend on the existing lender’s criteria and the changes being requested.
Changes to income, employment, borrowing, property ownership or other circumstances can affect the options available.
The lender or an appropriately authorised mortgage adviser can explain which mortgage products you may be eligible for.
What Happens When Your Current Mortgage Deal Ends?
When an introductory or fixed mortgage deal ends, the mortgage does not normally disappear.
Unless another arrangement has been made, the mortgage will usually move onto the lender’s applicable follow-on rate, often its standard variable rate (SVR).
That rate may be higher than the rate on the previous deal.
This is why many homeowners start considering their options before the existing mortgage deal expires.
Depending on the circumstances, those options might include taking another product with the existing lender or remortgaging to a different lender.
When Should You Start Comparing Your Options?
It can be sensible to start reviewing your mortgage options up to six months before your existing deal ends.
This provides time to consider the products available from your current lender and compare them with potential remortgage options elsewhere.
Starting early is particularly useful if you intend to remortgage because the mortgage application and conveyancing process will need time to complete.
It can also provide more time to resolve unexpected mortgage or legal issues before your existing deal ends.
Source: MoneyHelper – Remortgaging Guidance
What About Early Repayment Charges?
An early repayment charge (ERC) may apply if you repay or change your existing mortgage before the end of a particular deal period.
This can be relevant when deciding when to complete a remortgage.
Depending on the existing mortgage terms, completing too early could result in an ERC being payable.
Product transfers may also have conditions relating to when a new deal can begin.
Check the terms of your existing mortgage and any proposed new mortgage carefully before deciding when to make the change.
Product Transfer or Remortgage: Which Is Better?
There isn’t one answer that will be right for every homeowner.
A product transfer can offer a simpler and potentially quicker route because you remain with your existing mortgage lender.
A remortgage allows you to consider mortgage products offered by other lenders, but normally involves a new mortgage application and conveyancing.
The important comparison isn’t simply:
“Which option is easier?”
It is:
“Which option is most appropriate and cost-effective for my circumstances?”
That means considering the mortgage rate and monthly payments alongside product fees, incentives, early repayment charges, legal costs and the terms of the mortgage.
Trusted Conveyancers can help with the legal work involved in a remortgage, but advice about which mortgage or product is suitable should come from your mortgage lender or an appropriately authorised mortgage adviser.
Product Transfer vs Remortgage: Quick Answers
Why Choosing the Right Conveyancer Matters
A straightforward product transfer may not require conveyancing, but moving your mortgage to a new lender normally does.
Your conveyancer will deal with the legal title, lender requirements, repayment of your existing mortgage and registration of the new mortgage.
At Trusted Conveyancers, we’ve done the hard work, so you don’t have to. Rather than spending hours comparing firms yourself, we’ve carefully assessed the conveyancing firms we recommend based on communication, service standards, transparency and professionalism, so you can choose with confidence.
Remortgage Experience
A conveyancer experienced in remortgaging will understand the legal work and requirements of mortgage lenders.
Clear Communication
Regular updates help you understand how your remortgage is progressing and whether anything is holding it up.
Carefully Selected Firms
Every conveyancer we recommend is assessed against our selection criteria before being included.
A Smoother Remortgage
Proactive case management can help identify issues early and reduce avoidable delays.
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