Your current mortgage deal is coming to an end and a letter has landed from your lender offering you a new rate. Do you take it, or do you shop around? That is the whole product transfer vs remortgage question, and it is one we talk clients through every single week. The honest answer is that neither option is always right. Sometimes staying with your current lender is the quickest, cheapest and most sensible thing you can do. Sometimes it costs you thousands of pounds over the next few years. This guide explains what a mortgage product transfer actually is, how it differs from a remortgage, and how to work out which one suits your situation when your current deal ends.
One thing worth saying up front: we are a fee free mortgage broker, and we can arrange a product transfer with your existing lender just as easily as a remortgage to a new lender. So there is no pull in either direction from our side. We simply run the numbers both ways and show you.
A product transfer is when you move from your existing deal to a new mortgage deal with the same lender, without changing anything else. The loan stays the same amount, the mortgage term stays the same, the repayment type stays the same and the property stays the same. All that changes is the interest rate and the product terms attached to it. Because the lender already knows you and already holds the mortgage over your home, it is a much lighter process than a new application.
Lenders call it different things. You might see it described as a rate switch, a product switch, a customer retention deal or simply switching your deal. They all mean the same thing: staying with your current provider on a new mortgage product.
The product transfer process is about as simple as mortgages get. Your existing lender publishes a set of retention rates for existing customers, usually a little different from the rates it offers new borrowers. You, or your mortgage broker on your behalf, pick one of those rates and submit a short application. In most cases there is no affordability assessment, no credit check, no property valuation and no legal work. The lender confirms the new rate, sends a short offer document, and the new deal starts the day your current deal ends. From start to finish it can take a matter of days, and many lenders let you secure a new rate up to six months before your existing deal expires.
Because nothing about the loan changes, a product transfer cannot help you borrow more money, shorten or lengthen the mortgage term, switch from interest only to repayment, add or remove a borrower, or consolidate debts. If you want to do any of those things, you either need a further advance alongside the product transfer, or a full remortgage.
A remortgage is a brand new mortgage on a home you already own, either with a different lender or, less commonly, a completely new application with your current lender. The new mortgage pays off the existing mortgage and replaces it. Because it is a new loan, everything is assessed from scratch: your income, your outgoings, your credit history, and the value of your property. That is more work than a product transfer, but it also opens up every deal in the mortgage market rather than one lender's retention range, and it lets you change the loan itself.
You apply to the new lender in the same way you did when you first bought, through a broker or directly. There is an affordability assessment and a credit check, the lender arranges a property valuation, and a conveyancer handles the legal work of repaying the old mortgage and registering the new one. Many lenders offer a free valuation and free legal work on remortgage products, or cashback towards them. The whole thing typically takes four to eight weeks, which is why we recommend starting the conversation three to six months before your current deal ends. Our guide on how early you can remortgage covers the timing in more detail.
Here is how the two options compare on the things that actually matter when your current mortgage deal ends.
| What matters | Product transfer (same lender) | Remortgage (new lender) |
|---|---|---|
| Choice of deals | Your existing lender's retention range only | The whole mortgage market |
| Affordability checks | Usually none if nothing changes | Full affordability assessment |
| Credit check | Usually none | Yes, a hard search |
| Property valuation | None, the lender uses its own index | Yes, often free on remortgage products |
| Legal work and fees | None | Conveyancer needed, often free or cashback |
| Speed | Days | Four to eight weeks |
| Paperwork | Minimal | Payslips, bank statements, ID |
| Borrow more | Only via a separate further advance | Yes, built into the new mortgage |
| Change term or repayment type | Not normally | Yes |
| Add or remove a borrower | No | Yes |
| Product fees | Fee and fee free options | Fee and fee free options |
| Early repayment charges | None if timed to your current deal ending | None if timed to your current deal ending |
Staying with your existing lender tends to win when at least a couple of these apply to you.
If you have gone self employed, taken a pay cut, been on maternity leave, taken on new credit or had a blip on your credit file since you took out your current mortgage, a new lender's affordability checks might not go your way. Because a product transfer normally skips the affordability assessment and the credit check, your existing lender will let you switch to a new deal regardless. For a lot of people this is the deciding factor, and it is nothing to be embarrassed about.
A new lender will value your property and price your deal on the loan to value that comes out of it. If prices have dipped in your area, or you bought with a small deposit, you could find yourself in a higher LTV band with worse interest rates, or unable to remortgage at all. Your current lender does not usually revalue for a product transfer, so you stay in the band you are already in.
If your existing deal ends in a few weeks and you have left it late, a product transfer can be done in days. A remortgage cannot. Falling onto the lender's standard variable rate (SVR) for even a month or two can cost hundreds of pounds, so speed matters. That said, if a remortgage is clearly better value, it is often worth doing the product transfer to avoid the SVR and then reviewing again later, provided the new product has no early repayment charge or the saving outweighs it.
Sometimes your existing lender's retention deal is simply the best deal on the table, or so close to it that the hassle of moving is not worth it. Lenders know that keeping existing customers is cheaper than winning new ones, so retention pricing has become far more competitive than it was a decade ago. We check it against the whole market every time, because you cannot know it is competitive until you have compared it.
No payslips, no bank statements, no solicitors, no valuer knocking on the door. If your life is busy and the saving from switching lenders would be small, the product transfer wins on convenience alone.
Switching to a new lender tends to win in these situations.
This is the obvious one. If a different lender is offering a lower interest rate for the same loan to value and the saving over the deal period is bigger than the cost of moving, remortgaging saves you money. On a £250,000 mortgage, a difference of 0.3% is roughly £60 a month, or over £3,600 across a five year fixed rate. Free valuation and free legal offers mean the cost of moving is often nil, so even a small rate gap can be worth taking.
Home improvements, a deposit for a second property, a new kitchen or helping the kids onto the ladder: if you want to raise money against your home, a remortgage builds the extra borrowing into one new mortgage at one rate. Your existing lender may offer a further advance instead, but it is usually priced separately and sits alongside your main deal with its own end date. Our remortgage to release equity page explains the options.
Rolling credit cards and loans into your mortgage can cut your monthly payments, though it usually means paying more interest over the long run because the debt is spread over the mortgage term. It is a full remortgage rather than a product transfer, and it needs proper advice. See our debt consolidation remortgage guide.
Shortening the term to clear the mortgage sooner, moving from interest only to repayment, or taking a name off the mortgage after a separation are all things a product transfer cannot handle. A remortgage can, and if it can be done with your existing lender as a new application, that is sometimes an option too.
If your home is worth more than when you bought, your loan to value has fallen, and a new valuation could drop you into a cheaper band. Your existing lender may or may not reflect that in its retention pricing, so it is worth checking what the market would offer at the new LTV.
Offset mortgages, products with generous overpayment allowances, or deals with no early repayment charges are not offered by every lender. If your current lender's range does not include the features you want, the broader range available through a remortgage is the only way to get them.
Take a homeowner with £220,000 outstanding, 22 years left on the term, on repayment, whose two year fixed rate is about to end. Their existing lender offers a retention rate with no product fee. A new lender offers a rate 0.35% lower with a £999 product fee, free valuation and free legal work.
The remortgage saves about £40 a month, or around £2,500 over a five year fixed rate, minus the £999 fee: a net saving of roughly £1,500. Worth it? Probably, if the homeowner has the time and their circumstances will pass the new lender's checks. If the rate gap was 0.15% instead, the saving would barely cover the fee and the product transfer would be the sensible choice. These figures are illustrative only, but they show the point: the answer depends on the size of the gap, the fees and how long you will keep the deal.
Your existing lender is not obliged to offer you its best rate, and the letter will not tell you what other lenders are charging. Existing customers who take the first rate they are offered without comparing it are the ones who overpay. It takes us about twenty minutes to compare it properly.
When your current deal ends, you move onto the lender's standard variable rate automatically. SVRs are usually several percentage points above fixed rates, and on a typical mortgage that can mean an extra £200 to £400 a month. Diarise the end date, and start looking at least three months ahead. If you are already on the SVR, do not wait: a product transfer can normally start the following month.
If you remortgage or product transfer before your existing deal ends, early repayment charges usually apply, often 1% to 5% of the balance. The trick is to time the new deal to start the day after the old one finishes. With a product transfer that is automatic. With a remortgage, we ask the conveyancer to complete on that date.
Plenty of people assume a broker only helps with remortgages to a new lender and that a product transfer has to be done directly with the bank. Not so. We can arrange the product transfer for you, we are paid by the lender for doing it, and we still compare it against the whole market first. You get the same fee free advice either way.
If you are an existing client we already have it. If not, tell us when your current deal ends and we will get in touch six months beforehand, when most lenders open their switch window.
We obtain the product transfer rates from your existing lender, along with a redemption statement showing your exact balance and any early repayment charges.
We look at every lender's rates for your loan to value, including product fees, valuation fees, legal costs and cashback, and work out the total cost over the deal period for each option. If you want to borrow more or change the term, we build that in.
If the product transfer wins, we submit it and you are done within days. If a remortgage wins, we handle the application, the valuation and the conveyancer, and time completion so you never pay a day of SVR or a penny of early repayment charge.
No. A product transfer is a new deal on your existing mortgage with the same lender, with no change to the loan. A remortgage is a new mortgage, usually with a new lender, that repays the old one and can change the amount, term and borrowers.
Not normally. Because the loan is not changing, most lenders do not run a credit check or an affordability assessment for a straight product transfer. If you want to borrow more at the same time, the additional borrowing will be assessed.
No. There is no legal work because the mortgage itself does not change. A remortgage to a new lender does need a conveyancer, although many lenders cover the cost.
Usually a few days from application to offer, and the new rate starts when your current deal ends. Most lenders let you lock a rate in up to six months ahead, and many let you change to a cheaper rate if one appears before the switch date.
Yes. We arrange product transfers with your existing lender and are paid a procuration fee by the lender for doing so, which is why our advice stays fee free. We always compare the retention rate against the market before recommending it.
Not within the product transfer itself, but most lenders offer a further advance alongside it. The further advance is assessed on affordability and usually sits on a separate rate. If you want everything on one deal, a remortgage is the cleaner route.
You move onto your lender's standard variable rate, which is almost always higher than the fixed or discounted rate you were on. There is no early repayment charge on an SVR, so you can switch at any time, but every month you wait costs money.
It depends on your appetite for risk and what you expect interest rates to do. Our guide to fixed vs tracker mortgages and our piece on two or five year fixed rates walk through the trade offs.
Whether you end up staying with your existing lender or moving to a new one, the worst outcome is doing nothing and drifting onto the standard variable rate. Send us the date your current mortgage deal ends and we will do the comparison for you, free of charge, with no pressure either way. You can read more about how we work on our fee free remortgage broker page, or if the property is a rental, our buy to let remortgage page covers landlords.
Get in touch or call 03300 432 428.
Your home may be repossessed if you do not keep up repayments on your mortgage. Figures in this guide are for illustration only and do not reflect any specific lender's current rates. Think carefully before securing other debts against your home.
