Staying with your current lender can be simpler, but it is not automatically cheaper. Moving to another lender can open up different options, but the benefits need to justify the costs and work involved. Compare both routes against your circumstances and future plans, rather than choosing solely on convenience or the headline rate.
This guide is for homeowners comparing a new deal on their current home. Moving house, changing ownership or increasing borrowing can involve different requirements.
What is the difference between a product transfer and a remortgage?
A product transfer means choosing a new mortgage product with your existing lender. It is also called a rate switch. A straightforward transfer usually keeps the property, borrowers and borrowing the same, apart from any fees added to the loan.
A remortgage, as used in this guide, means taking a mortgage with a different lender to replace the existing mortgage on the same property. The new mortgage pays off the old one when the transaction completes.
Neither route is the same as automatically moving onto the follow-on rate in your current agreement when your deal ends. Choosing a replacement deal is an active decision.
Product transfer vs remortgage at a glance
This comparison assumes you are staying in the same property. Exact requirements depend on the lender, product and any other changes you request.
| What to compare | Product transfer | Remortgage |
|---|---|---|
| Lender | You stay with your current lender. | You replace your mortgage with one from another lender. |
| Available deals | Your lender's eligible existing-customer products. | Other lenders' products for which you qualify. |
| Affordability checks | Often no fresh assessment for an eligible, straightforward switch. | Normally assessed; modified assessments may be available in some cases. |
| Legal work | Usually no new conveyancing for a simple rate switch. | Legal work is normally needed to change lenders. |
| Fees | A product fee may apply; check any early-switching charge. | Product, exit, legal and valuation costs may apply; some may be covered. |
| Process | Generally less administration, subject to eligibility and deadlines. | A new application, valuation and legal process to coordinate. |
Will I need affordability or credit checks?
For an eligible product transfer without additional borrowing, lenders often do not require a fresh affordability assessment or credit search. That can make the process simpler if your income or employment has changed. However, do not assume that every lender, account or requested change qualifies.
Moving lenders normally involves an assessment of your application, including your finances, credit history and the property. Being accepted by your current lender in the past does not guarantee acceptance elsewhere.
There are exceptions to a full affordability assessment when switching lenders. FCA rules allow modified assessments in certain circumstances, including some switches without extra borrowing other than permitted fees. Eligibility conditions apply and lenders decide whether to use this flexibility. It is not a promise of approval or a way to bypass all checks.
Tell your adviser about reduced income, missed payments or other changes before choosing a route. The useful question is which suitable options are actually available to you.
Is a product transfer cheaper than remortgaging?
It can be, but not always. A simple product transfer usually avoids new conveyancing and a separate valuation fee, but the new product may still carry a fee. A remortgage may have extra costs, although some lenders cover standard legal work or valuations, or offer cashback. Check what is included and what is excluded.
Compare deals using the same borrowing amount and repayment term where possible. Look at the interest and fees over a comparable period, the balance left at the end, any incentives and the cost of leaving your existing deal. Fees added to the mortgage attract interest while they remain part of the loan.
A lower payment does not tell the whole story
For illustration, paying £30 less each month for 24 months reduces those payments by £720. That alone would not cover an extra £999 upfront fee. You would still need to compare the remaining loan balances and all other costs. This is a simple cash-flow example, not a mortgage quote or a complete comparison.
A lower payment achieved by extending the repayment term is also not the same as a cheaper mortgage: spreading repayments over longer can increase the total interest paid.
When might staying with my lender make sense?
A product transfer may suit you when your current lender offers a competitive overall deal, its features fit your plans and you do not need significant changes to the mortgage. The reduced administration can also be helpful when time is short.
If you have a relatively small mortgage balance, additional fees elsewhere may outweigh a modest rate improvement. If your circumstances have changed, check whether you qualify for an existing-customer switch before assuming you have no options. Neither point means you should skip comparing alternatives.
When might moving to another lender make sense?
A remortgage may be worth considering if another lender offers a meaningful overall saving, more suitable overpayment options or a product better aligned with your plans. Check whether those benefits remain worthwhile after fees and any early repayment charge are included.
Compare the property value used in each offer too. Your loan-to-value is the borrowing as a percentage of that value and can affect the rates available. Staying with your lender does not automatically mean losing access to a better loan-to-value band; ask how it has assessed your property and whether its figure can be reviewed.
What if I want to borrow more or change the mortgage?
A straightforward product transfer does not itself provide extra money. Your current lender may offer additional borrowing, sometimes called a further advance, which can have its own rate, fees and assessment. Compare that combined arrangement with a remortgage for the total amount you need and any suitable alternatives.
Changing the borrowers, ownership, repayment method or overall mortgage term is also more than simply selecting a new rate. Extra checks, advice or legal work may be needed. Choosing a new fixed-rate deal does not automatically extend the date by which the mortgage must be repaid.
Increasing borrowing secured on your home increases what you owe against it. Any extra borrowing needs to be affordable, and a longer term can mean paying more interest overall.
What should I check before deciding?
- Your starting position: the balance, remaining term, deal end date and early repayment charges on each mortgage part.
- Like-for-like costs: fees, payments, interest, incentives and the balance remaining over the comparison period.
- Your plans: moving home, overpaying, retiring or needing additional borrowing during the new deal.
- Timing:when the new deal can start and whether there could be a gap on your lender's follow-on rate.
- Changing your mind: deadlines, refundable fees and whether a different rate can be selected before the deal starts.
A product transfer does not automatically remove an early repayment charge. Some lenders allow an early switch within a specified window, while others apply different conditions. Check the exact start date and terms before committing.
For help deciding when to begin, read When should I remortgage?
Can a mortgage broker help with a product transfer?
Yes, where the lender accepts product transfers through brokers. You do not necessarily need to move lenders to receive advice. I can review your current mortgage and compare the options available for your circumstances, including whether staying or switching is the more suitable route.
I do not charge a mortgage broker fee. If I arrange your mortgage, I receive commission from the lender when the transaction completes. Lender and third-party costs may still apply, and I will explain the relevant costs before you decide to proceed.
Book a free initial mortgage conversation or find out more about my remortgage advice service.
This guide provides general information, not a personal mortgage recommendation. Products, criteria and lender processes can change. The suitable option depends on your individual circumstances.
Your home may be repossessed if you do not keep up repayments on your mortgage.