When your mortgage fixed rate is coming to an end, you’ll typically receive a letter from your lender offering you a product transfer — a new rate to switch to without leaving the lender.
But is this offer competitive? Or could you save more by remortgaging to a different lender entirely?
What Is a Product Transfer?
A product transfer is when you move to a new mortgage product with your existing lender without going through a full remortgage application.
How Product Transfers Work
- No new lender — you stay with your current provider
- Limited choice — only your lender’s available rates
- Quick process — typically 2-3 weeks
- Minimal paperwork — often no affordability assessment
- No valuation — lender already knows your property
- No legal fees
What Is a Remortgage?
A remortgage involves switching your mortgage to a completely different lender.
How Remortgaging Works
- New lender — you switch to a different provider
- Whole market access — compare rates from all UK lenders
- Longer process — typically 4-8 weeks
- Full application — includes affordability and credit check
- Property valuation required
- Legal work needed (often free through lender offers)
Key Differences at a Glance
| Factor | Product Transfer | Remortgage |
|---|---|---|
| Speed | 2-3 weeks | 4-8 weeks |
| Product Choice | Limited to lender | Whole of market |
| Affordability Check | Often not required | Always required |
| Valuation | Not required | Always required |
| Legal Fees | None | £0-£800 (often free) |
When a Product Transfer Makes Sense
1. Your Lender’s Rate Is Competitive
If your lender’s rate is within 0.1-0.2% of the best market rates, convenience often outweighs the small difference.
2. You Need Speed
If your rate has already ended or is ending within 4 weeks, a product transfer gets you off the expensive SVR quickly.
3. Your Circumstances Have Changed
Recent job change, credit issues, or reduced income? Your current lender may not reassess affordability for a product transfer.
4. You Want Simplicity
No gathering documents, no valuation, no solicitors.
When Remortgaging Makes Sense
1. Better Rates Are Available
If you can find a rate 0.3% or more lower, remortgaging likely saves you money.
Example: £250,000 mortgage
- Current lender: 4.8% (£1,313/month)
- New lender: 4.3% (£1,248/month)
- Monthly saving: £65
- Annual saving: £780
- 5-year saving: £3,900
Even with £1,500 in fees, you save £2,400 over 5 years.
2. You Want to Release Equity
Need additional funds for home improvements, debt consolidation, or other expenses? Remortgaging gives you full flexibility.
3. Your Property Value Has Increased
If your property has increased in value, you may have moved into a lower LTV band with better rates.
Example:
- Original: £180,000 on £200,000 property (90% LTV)
- Current: £170,000 balance; property now £250,000 (68% LTV)
- Result: Access to 75% LTV rates — potentially 0.5-1% lower
4. You Want Cashback or Incentives
Many lenders offer £500-£2,000 cashback, free valuations, and free legal work.
How to Decide: Your Framework
Step 1: Get Your Lender’s Offer
Note the best rate, arrangement fee, and product term.
Step 2: Compare the Whole Market
Use a broker to find the best available rate for your circumstances.
Step 3: Calculate Total Cost
Compare total cost over the full term, not just monthly payment.
Formula: (Monthly Payment × Months) + Fees – Cashback
Step 4: Consider Non-Financial Factors
- How quickly do you need to switch?
- Do you have time to gather documents?
- Has your income/credit situation changed?
Real Example: Sarah’s Choice
Situation: £220,000 mortgage, 4 months until rate ends
Product Transfer: 4.6% for 5 years, £999 fee
- Monthly: £1,223
- Total (60 months): £73,380
- Fee: £999
- Total cost: £74,379
Remortgage: 4.2% for 5 years, £1,499 fee, £1,000 cashback
- Monthly: £1,169
- Total (60 months): £70,140
- Fee: £1,499
- Cashback: -£1,000
- Total cost: £70,639
Saving by remortgaging: £3,740 over 5 years
Speak to a Whole-of-Market Broker
The easiest way to compare is to speak with an independent mortgage broker who can:
- Compare your lender’s offer against the whole market
- Calculate total costs for both options
- Recommend the best route for your circumstances
- Handle the application if you remortgage
Key Takeaways
- Product transfers are fast but may not offer the best rate
- Remortgaging gives whole-market access and often better rates
- Compare total cost, not just rates
- Start early (3-6 months) to avoid rushed decisions
- Get expert advice to compare both routes
Ready to Compare Your Options?
If your mortgage deal is ending soon, we can compare your lender’s product transfer against the whole market.
Call us on 0800 612 3367 or request a callback
Your home may be repossessed if you do not keep up repayments on your mortgage.
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