Is a Product Transfer on your mortgage Right for You?

When it’s time to make decisions at the end of a fixed-rate mortgage, it can be difficult to choose your next steps. One popular option for homeowners is a product transfer with your current lender. In this article, we’ll explain what a product transfer is, when you should consider it and how it differs from remortgaging to help you decide whether a product transfer is the right option for you. We’ll also provide an overview of how a mortgage broker like Eden Hawk Financial Solutions can help you decide which mortgage options to review when your fixed term ends.

What is a Product Transfer?

A product transfer is when you switch to a new mortgage product with your existing lender when your current deal ends. It’s a way to stay with your lender and move to a new rate or term that suits your personal situation.

Unlike remortgaging, which means moving to a different lender, a product transfer means everything stays with your same lender. This makes the product transfer process quicker and simpler, with less paperwork. Many lenders offer new products when your current mortgage deal ends, so you can choose one that fits your current goals. More often, your current mortgage deal will revert to your lender’s standard variable rate, which may be a higher interest rate than what you have been paying for your mortgage repayments.

For example, if your 2-year fixed rate mortgage is ending, instead of reverting to the standard variable rate (SVR) you might want to switch to another product with the same lender. This is where a product transfer comes in.

When to Consider a Product Transfer

Not everyone benefits from remortgaging, especially if it comes with fees or your situation has changed. Consider product transfer mortgages in the following scenarios:

You want a hassle-free process

Product transfers are ideal if you want minimal effort and paperwork. There is usually no underwriting process given you already have your mortgage with that lender.

Your situation has changed

If your credit score has dropped, your income has varied, your mortgage repayment history is inconsistent, or your financial situation has changed, switching lenders might be more difficult.

You want to avoid fees and costs

Remortgaging may involve admin, solicitor and valuation fees, whereas product transfers don’t. If saving on upfront costs is your priority, a product transfer might be the way to go.

Your Loan to Value (LTV) hasn’t changed

If your property value hasn’t increased or your LTV hasn’t improved, you may not be able to get better deals elsewhere. A product transfer means you move straight to a new deal without worrying about external market conditions.

While these are good reasons to consider a product transfer, every situation is different. A mortgage broker can help you compare this to remortgage options to see if it’s the most suitable choice for you.

What’s the difference between a Product Transfer and Remortgaging?

There are several key differences between mortgage product transfers and remortgaging. These include:

Mortgage Product Transfer

• Lender: You stay with your current lender and switch to a new product.
• Process: Quick and simple, limited paperwork, no property valuation, minimal fees.
• Flexibility: Limited options compared to shopping around with other lenders.
• Suitable for: Those who want convenience, to save more money up front, or to avoid additional checks that a remortgage to a new lender would involve

Remortgaging

• Lender: You can shop around and switch to a new mortgage lender with better deals if they’re available.
• Process: More paperwork, valuations and credit checks which take longer.
• Flexibility: More products and potentially better rates are available in the market.
• Suitable for: Homeowners with more equity or looking for competitive rates.

In essence, remortgaging gives you more options than product transfers when your mortgage term ends, but requires more time.

Product Transfer Mortgage vs Remortgaging?

Before making a decision, it’s essential to weigh the pros and cons of both options.

Pros of a Product Transfer

• Quick and simple: No need for lengthy assessments or property valuations.
• Lower up front costs
• Convenience: You stay with a lender you already have a relationship with.
• Flexibility for situation changes: Less emphasis on affordability checks.

Cons of a Product Transfer

• Limited options: You’re stuck with your current lender’s products.
• Higher rates: You may miss out on better deals with other lenders.

Pros of Remortgaging

• Competitive rates: Compare deals across multiple lenders.
• Tailored products: Find deals that suit your long-term financial goals.
• Equity benefits: More equity in your home could get you better rates.

Cons of Remortgaging

• Extra costs: Valuation, solicitor and admin fees.
• Complexity: More paperwork and checks mean a longer process.
• Affordability issues: Changes in your situation may affect your eligibility with other mortgage lenders.

In the end, it’s all about your circumstances, priorities and goals. Discuss your options with mortgage brokers, your existing mortgage lender, and competitor lenders to make a decision.

How can Eden Hawk Financial Solutions help?

At Eden Hawk Financial Solutions we help homeowners make informed decisions about their mortgages and offer comprehensive product transfer mortgage advice. Whether you’re considering a product transfer or remortgaging, we’re with you every step of the way.

Why Choose Eden Hawk?

Expert Advice

We compare your options so you can choose the most suitable route – whether that’s staying with your current lender or going elsewhere.

No Fuss-Process

We do all the paperwork and negotiating so you can have a stress-free move to your next mortgage deal.

Personalised Solutions

Your mortgage situation is unique, and we tailor our advice to your financial goals and circumstances.

Final Thoughts

When your fixed rate deal ends, it’s easy to just stick with the simple option. A product transfer mortgage is convenient, quick and cost-effective, so it’s a popular choice for many homeowners. But if you want to save more or get better rates on your mortgage payments, remortgaging might be the way to go.

The key is to align your mortgage decision with your financial goals – and that’s where expert advice can make all the difference. At Eden Hawk Financial Solutions, we can help you find the right fit.

Get in touch today to explore your options.