What is a product transfer mortgage, and how does it work?

What is a product transfer mortgage?

A product transfer mortgage allows homeowners to switch to a new mortgage deal with their existing lender instead of moving to a different provider.

Unlike remortgaging, where you transfer your loan to a new lender, a mortgage product transfer simplifies the process, often avoiding legal fees or property valuations.

Rates can sometimes be much lower than the standard variable rate (SVR), and many lenders allow you to arrange a product transfer before your current deal ends.

Some lenders offer dedicated product transfer options, enabling their clients to switch deals easily. High street banks also provide similar mortgage product transfer options, but the availability and terms may vary.

Unbiased can match you with a mortgage broker who can help you find the right mortgage for your circumstances. 

How does a mortgage product transfer work?

A mortgage product transfer is typically quicker and more straightforward than remortgaging. Since you remain with the same lender, the process focuses on updating your existing agreement rather than creating a new one.

Below is a step-by-step guide.

1. Review your current mortgage deal

Start by analysing your existing mortgage agreement. Look for key details such as the interest rate, when the current deal ends, and any early repayment charges (ERCs). Understanding these factors ensures you make an informed decision about switching.

2. Check eligibility

Next, check whether you meet your lender’s criteria for a product transfer mortgage. Most lenders require borrowers to be up to date with their mortgage payments. To confirm eligibility, contact your lender. Common documents include identification, proof of income, and evidence of homeownership.

3. Choose a new product offered by your lender

Once eligibility is confirmed, you can review the mortgage products offered by your lender. These deals are usually easy to access through the lender’s online portal or customer services

While product transfers are straightforward, a mortgage broker can help you compare options and secure the best rate.

4. Finalise the transfer

The final step involves agreeing to the new product terms and completing the necessary paperwork. Since no legal or property valuation work is required, the process is significantly quicker and often finalised within a few weeks.

What are the benefits of a product transfer mortgage?

A product transfer mortgage offers several advantages that make it an attractive option for many homeowners:

• Speed and simplicity: The process does not require property valuations or legal work, saving you time, effort and money.
• Lower fees: Product transfers often avoid ERCs and broker fees, often making them more cost-effective than remortgaging.
• You stay with your lender: You continue working with a trusted lender, ensuring a seamless transition and peace of mind.
• Flexibility: Some lenders allow you to negotiate better terms when transferring products.

Additionally, you can sometimes switch to a new deal before your existing one officially ends, depending on your lender’s policies.

What are the drawbacks of a product transfer mortgage?

Despite its benefits, a product transfer mortgage has some limitations:

• Limited options: You can only access the products offered by your current lender, potentially missing out on better deals elsewhere that could save you money.
• Higher rates: While a product transfer mortgage is convenient, the rates may not be as competitive as remortgaging with a different lender.
• Lack of independent advice: Unless you consult a mortgage broker, you might not receive advice tailored to your situation.

In some scenarios, not requiring a property valuation can be a disadvantage. For example, if the value of your home has significantly increased, a new valuation could unlock better rates. It’s also important to note product transfer mortgages do not allow you to move home.

How does a product transfer mortgage compare to remortgaging?

When deciding between a mortgage product transfer and remortgaging, it’s important to compare key factors:

• Cost: Product transfers often involve lower fees as there’s no legal work or valuation. Remortgaging may include solicitor and valuation fees but could provide lower interest rates, helping to save you money in the long run.
• Process: Product transfer mortgages are quicker and involve minimal paperwork while remortgaging requires more time and administration.
• Flexibility: Remortgaging offers access to a broader range of market deals, which could result in more competitive rates and save you money. 

A product transfer mortgage is often preferable if you need a quick solution, have a deteriorating credit score, or are content with your current lender.

Additionally, some lenders may not require a credit check for product transfers, which can be beneficial for those with financial concerns.

What is a Precise Mortgages product transfer?

A Precise Mortgages product transfer enables existing clients to switch to a new mortgage deal with Precise Mortgages without changing providers. This process is streamlined and avoids the need for legal work or property valuations, saving both time and money.

Precise Mortgages offers a range of options, including fixed and variable rates, with some products tracking the Bank of England base rate (BBR). Eligibility criteria include being up to date with mortgage payments and meeting other lender-specific conditions.

While Precise Mortgages is a specialist lender offering efficient product transfer solutions, other providers, including high street banks such as Nationwide, Barclays, Santander and Lloyds, and niche lenders such as Kensington Mortgages, offer similar services. 

However, their terms, eligibility requirements, and rates may vary, so it’s important to explore your options to ensure you’re getting the right deal for your circumstances.

When is a product transfer the right choice?

A product transfer mortgage is an ideal solution in the following situations:

• You are happy with your current lender: Staying with a lender you trust can simplify the process.
• Your financial situation has changed: If your credit score or income has worsened, a product transfer avoids the stricter checks often associated with remortgaging.
• You need a quick, hassle-free option: Product transfers involve minimal paperwork and can often be completed faster than remortgaging.

In scenarios where simplicity, speed and minimal costs are priorities, a product transfer mortgage offers a clear advantage.

Get expert financial advice

Choosing a product transfer mortgage can offer a faster, more straightforward, and cost-effective way to secure a new deal with your current lender.

Whether you’re considering a transfer through a lender or comparing options elsewhere, understanding the process and weighing the benefits against the drawbacks is key. 

For many borrowers, this approach provides the flexibility and convenience needed to keep their mortgage on track with minimal hassle.

Let Unbiased match you with a qualified mortgage broker or financial adviser to help you explore tailored solutions and secure the right deal for your needs.