Mortgage Product Transfers are transactions where borrowers move to a new deal rate with their existing lender without changing any other terms of the mortgage that would trigger a new Regulated Mortgage Contract.

This is an increasingly popular choice among homeowners, especially as interest rates have risen and mortgage affordability has tightened.

In 2022, there were six times as many product transfers as remortgages, with 1.27 million product transfers compared to 190,000 remortgages. This represents a significant increase, with product transfers up four times on the previous year.

In the first quarter of 2019, 290,000 homeowners switched products with their existing provider. This represented £39.2 billion of mortgage debt refinanced internally. Interestingly, of these transfers, 161,100 were on an advised basis, worth £22.7 billion, and 128,900 were conducted on an execution-only basis, worth £16.5 billion.

These figures highlight the growing trend of Mortgage Product Transfers and the significant role they play in the UK’s mortgage market.

The term mortgage product transfers means that you can transfer your current mortgage to a new one before or after your current mortgage deal ends. At NeedingAdvice.co.uk Ltd, we receive various enquiries from customers who are interested in product transfer with the product transfers in the UK.

Here in this article, we will discuss the topic of “mortgage product transfers” and explore the topic in detail.

Read about what credit score mortgage is required for a mortgage on our blog.

What is a product transfer mortgage?

Product transfers are a way to switch to a different mortgage product with your current lender without having to go through another application process. This means you can get a better rate or lower monthly payments by switching products.

However, this method isn’t always an easy solution. You’ll need to do some research before you take the plunge. There’s also no guarantee that you will be accepted for the new product. It may not even be possible to transfer if you’re already under a fixed-rate agreement.

Sometimes, it is also known as a rate switch, which is a process of switching to a better rate with your existing mortgage lender.

Usually, a product transfer will be seamless, and the new interest rate will start on the same day the old rate expires. With some lenders, if the new rate is cheaper than the old rate, then they allow the new rate to start 1, 2 or even three months early.

Some lenders offer cheaper rates for product transfers through a broker than they do going direct. Also, in some cases, lenders might only offer product transfers via brokers and will not offer product transfers directly via their own call centres or branches.

There are some lenders who are not good at communicating about the competitive rates that they have reserved, especially for existing customers, so in this case, an expert mortgage broker could help you with your product transfer.

What is the mortgage product transfer procedure?

The mortgage product transfer is a straightforward process, but it’s often beneficial to have a mortgage broker to guide you through your application. The product transfers can typically be arranged quickly over the phone or in the branch. However, the applicant may be subjected to an affordability check, which involves filling out an income and expenditure form. This is to ensure that the new mortgage product is suitable for your financial situation.

It’s also important to note that some high street lenders may reject the product transfer application for their standard products. This could be due to various reasons, such as the applicant’s credit score, changes in financial circumstances, or the property’s value.

Furthermore, during a product transfer, your lender will provide you with a new mortgage offer detailing the terms of the new deal. Once you accept this offer, the lender will set a date for the product transfer to take place. Usually, this will be the day after your current deal ends to ensure a seamless transition.

Remember, while a product transfer can be a great way to get a better deal without the hassle of a full remortgage, it’s always a good idea to shop around and compare deals from other lenders as well. A mortgage broker can help you with this process, ensuring you get the best possible deal for your circumstances.

Difference between mortgage porting and mortgage product transfer

Porting a mortgage is defined as transferring your current mortgage deal to a new property. Mortgage product transfer, on the other hand, is defined as transferring your mortgage to a new deal with your current lender.

Mortgage porting typically incurs an administration fee, whereas mortgage product transfers do not. Mortgage product transfers may also offer you a discounted rate on your mortgage deal.

It’s important to note that mortgage porting is not available on all mortgages and that you may be required to provide updated financial information in order to qualify. Mortgage product transfers, on the other hand, may require an affordability check, which could involve a credit check

Mortgage porting is a good option if you’re looking to move home but don’t want to go through the hassle of finding a new mortgage deal. Mortgage product transfers, on the other hand, are a good option if you’re on a high-interest-rate mortgage or if you’re coming to the end of your current mortgage deal. Talk to your mortgage broker to see which option is best for you.

Mortgage product transfer rates and fees

Every lender has a different fee structure for product transfers. Standard product transfers are generally hassle-free as compared to a new mortgage application or remortgage. One of the main reasons people choose to use alternative products instead of transferring their loans is the rates they’re currently paying with their current lenders.

To get more details on rate switch/product transfers in the UK, you can find the below links-

Product Transfer with Bad Credit

A bad credit score can always create issues with any type of product transfer. Lenders always check your affordability when you start a product transfer application. So, it is always better to check your credit score before visiting your current mortgage lender for product transfer. We suggest you get copies of your credit file. It is best to check the dates and details of any defaults, CCJs, and missed payments. This can be done by following the link below:

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Next Steps

Getting a product transfer can be a convenient option for homeowners who want to move home or are coming to the end of their current mortgage deal. It allows them to transfer their existing mortgage product to a new property without going through the process of finding a new mortgage.

However, not all mortgages offer the option to port, so it’s important to check with your lender if this is available. If you do qualify for a mortgage product transfer, it’s important to compare rates and fees from different lenders to ensure you get the best deal. Additionally, if you have bad credit, it may be more difficult to secure a product transfer, so it’s important to check your credit score before starting the process.

Overall, speaking with a mortgage broker can help guide you through the options and determine if a mortgage product transfer is the best choice.

FAQs

What Is a Product Transfer Mortgage and How Does It Work?

A product transfer mortgage allows you to switch your current mortgage deal to a new offer with your existing mortgage lender. This process can be a cost-saving alternative to remortgaging, especially if you’re looking to avoid legal costs and valuation fees associated with moving to a new lender. The product transfer process involves selecting a new mortgage product from your current lender’s range, potentially moving from an initial mortgage deal, such as a fixed rate mortgage, to a variable rate mortgage or another fixed rate deal.

How Does a Product Transfer Differ from a Remortgage?

The key difference between a product transfer and a remortgage option lies in the simplicity and cost savings of staying with your current mortgage lender. Remortgaging often involves a full mortgage application process with a new lender, including credit checks, property valuation, and possibly higher legal costs. In contrast, a product transfer mortgage can offer a faster process with your current provider, usually without the need for a new property valuation or the same level of affordability checks.

Can You Borrow More When Transferring Your Mortgage Product?

Yes, when engaging in a mortgage product transfer, you may have the option to borrow additional funds, subject to an affordability assessment and eligibility factors considered by your lender. This could affect your monthly mortgage repayment, depending on the terms of the new mortgage deal and your financial position.

How Is Affordability Assessed for a Mortgage Product Transfer?

If you’re looking to borrow more or change your repayment method during the product transfer process, your mortgage lender will conduct an affordability check. This assessment considers your current financial commitments, proof of income, and overall financial situation to ensure you can manage the additional funds or new mortgage terms.

Is It Better to Stay with Your Existing Mortgage Lender?

Choosing whether to stay with your current mortgage provider or explore remortgage options with a new lender depends on your personal circumstances, including your financial position and the current product range available from your existing lender. Consulting with a mortgage advisor can help you understand the benefits of a product transfer mortgage versus a new mortgage agreement with another lender.

When Should You Consider a Mortgage Product Transfer?

You might consider a product transfer option when your current deal, such as a fixed rate period, is coming to an end, and you wish to avoid the lender’s standard variable rate (reversion rate). This is also an attractive option if you’re looking for a faster process to change your mortgage product without incurring high legal costs or valuation fees.

What Are the Costs Associated with a Mortgage Product Transfer?

While a product transfer can offer cost savings, especially in avoiding valuation fees and legal costs, there may still be fees associated with the new mortgage deal, such as an exit fee from your original loan or a procuration fee. It’s important to discuss any potential costs with your mortgage lender or mortgage broker.

Do You Need a Credit Check for a Mortgage Product Transfer?

A credit check is typically part of the product transfer application process, especially if you’re looking to borrow additional funds or if there has been a significant change in your financial situation since your original mortgage agreement. Your lender will review your credit file and credit report to assess your current financial commitment and eligibility for the new mortgage product.

Can You Cancel a Mortgage Product Transfer?

Yes, you generally have a cooling-off period during which you can cancel your product transfer application without incurring a penalty. However, the specific terms will depend on your mortgage agreement and the policies of your mortgage provider.

Do I Need a Mortgage Broker for a Product Transfer?

While not strictly necessary, consulting with a mortgage broker can provide valuable mortgage advice and help you navigate the advice process, ensuring you understand all available mortgage options and the potential benefits of staying with your current mortgage lender versus moving to a new lender.