Product Transfer or Remortgage: Which Is Better When Your Deal Ends?

When a fixed rate comes to an end, there are really only two ways to avoid drifting onto your lender's standard variable rate. You can take a new deal with the lender you already have, which is a product transfer, or you can move the mortgage to a different lender, which is a remortgage. Neither is automatically better. The right answer depends on the rates on offer, whether anything about your circumstances has changed, and whether you want to borrow more.

At Drummonds Finance Group we look at both options side by side for every client whose deal is ending. This guide explains how each one works, where each one wins, and the situations where the choice is made for you.

The difference in one paragraph

A product transfer keeps your mortgage with the same lender and simply moves it onto a new rate. There is usually no new credit check on affordability, no valuation and no solicitor. A remortgage replaces your current mortgage with a new one from a different lender. It involves a full application, a valuation and legal work, but it opens up the whole market and lets you change the size or shape of the mortgage.

When a product transfer is usually the better choice

Product transfers are quick and simple. Many can be arranged in days, and because the lender is not lending you any more, it doesn't normally reassess your income. That makes a product transfer especially useful if your circumstances have changed since you took the mortgage out. If you have gone self-employed, reduced your hours, had a period of missed payments or retired, a new lender might not offer you the same amount, but your existing lender will usually let you switch rates regardless.

A product transfer also tends to be cheaper to arrange. There are no legal fees, and many lenders don't charge a product fee on their switching deals. With us, product transfers carry no broker fee.

Landlords often benefit too. Moving a buy-to-let to a new lender means passing a fresh rental stress test, which can be harder if rates have risen since you bought. A product transfer usually avoids that test altogether. We handle switches with lenders including TML, Fleet Mortgages and BM Solutions.

When a remortgage is usually the better choice

The main reason to remortgage is a better deal. Your existing lender only offers its own rates, and they are not always the most competitive. Another lender may offer a lower rate or a more suitable product, and over a two or five-year fix the difference can be worth thousands.

A remortgage is also the natural route if you want to change the mortgage itself. That might mean borrowing more for home improvements or to consolidate debts, taking someone off or adding someone to the mortgage, moving from interest only to repayment, or releasing equity to buy another property. Our remortgage page covers these options in more detail.

Your home may also have risen in value since you bought it. A new valuation can move you into a lower loan to value band, which often unlocks better rates. Our LTV calculator will show you where you sit. Some lenders do take an updated valuation into account on a product transfer, but many don't.

Can you borrow more on a product transfer?

Sometimes. Many lenders let you apply for additional borrowing alongside a product transfer, but this is assessed like a new application, with affordability checks and sometimes a valuation. If you want to raise money without losing a good rate on your existing mortgage, there are other routes, such as a further advance or a second charge loan, which we have explained in raising money without losing your mortgage rate.

How early can you lock in a new rate?

Most lenders let you secure a product transfer between three and six months before your current deal ends, and a remortgage offer is usually valid for around six months. That means you can lock in a rate well in advance and still switch to a better one if rates fall before your deal ends.

Starting early is one of the simplest ways to protect yourself. We have explained the timing and the choices in more depth in mortgage rate ending: fix, tracker or wait.

Fees and costs to compare

A lower rate isn't always cheaper once fees are included. When you compare a product transfer with a remortgage, look at the total cost over the fixed period, including product fees, any valuation or legal fees and whether the new lender covers the legal work as part of its remortgage package. On smaller mortgages, a slightly higher rate with no product fee is often the better deal. On larger mortgages, paying a fee for a lower rate usually wins.

If you are still within an early repayment charge period, moving lender early can be expensive. Check your mortgage offer before acting, as most lenders let you switch without a charge in the last few months.

Situations where the choice is made for you

Some borrowers will find a remortgage difficult or impossible. That includes people whose income has fallen, those with recent credit problems, borrowers over a new lender's maximum age and owners of properties a new lender might not accept, such as some flats with cladding issues. In these cases, a product transfer is often the best way to keep a competitive rate. If credit is the issue, our adverse credit mortgages page explains how lenders view it.

Equally, some borrowers can't stay. If your lender has stopped lending, sold your mortgage to a company that doesn't offer new rates, or you need to change who is on the mortgage, a remortgage may be the only option. If you are moving home rather than staying put, porting your mortgage is a separate route worth looking at.

Frequently asked questions

Is a product transfer cheaper than a remortgage?

Often, because there are no legal or valuation fees. But a remortgage can still work out cheaper overall if another lender offers a much better rate.

Does a product transfer affect my credit score?

Most product transfers don't involve a full credit search. A remortgage does, as it is a new application.

Can I do a product transfer if I'm on interest only?

Usually, yes, as long as you still have a suitable plan to repay the mortgage. Our guide to interest-only mortgage ending options covers the choices.

Will my lender contact me before my deal ends?

Most lenders write to you a few months before, but their letter only shows their own rates. It is worth comparing them with the wider market before you accept.

Where we come in

The best way to decide is to see both options with real figures. We compare your lender's switching rates with the whole market, show you the total cost of each over the fixed period and arrange whichever works out better.

If your fixed rate ends in the next six months, get in touch or call 0330 1330034 and we'll look at it for you.

Important information

Your home may be repossessed if you do not keep up repayments on your mortgage.

Most buy-to-let mortgages are not regulated by the Financial Conduct Authority.

Think carefully before securing other debts against your home.

Drummonds Finance Group is a trading style of Liam Drummond, who is an Appointed Representative of Stonebridge Mortgage Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority. FCA number: 945428.