What is Product Transfer?

Full Definition

A product transfer is when an existing mortgage borrower switches onto a new rate or deal with their current lender, typically as their existing fixed-rate, tracker or discounted-rate period comes to an end, rather than remortgaging to a different lender entirely. Because the borrower is staying with the same lender, a product transfer usually involves a simpler process than a full remortgage: many lenders do not require a new full affordability assessment, credit check, property valuation or solicitor involvement, and the whole switch can often be arranged online or by phone in a matter of days rather than the weeks a remortgage to a new lender can take. The main reason to consider a product transfer instead of remortgaging elsewhere is convenience and speed, plus avoiding legal and valuation fees; the main reason to remortgage instead is that a different lender may offer a meaningfully better rate, particularly for borrowers whose financial circumstances or the property's value have improved since they last borrowed (lowering their loan-to-value band), or where the current lender's available product transfer rates are uncompetitive. Failing to arrange either a product transfer or a remortgage before an existing deal ends means the borrower automatically moves onto the lender's Standard Variable Rate, which is usually significantly higher than any available fixed or tracker deal, so most advisers recommend comparing both options starting three to six months before the current deal expires.

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