Product Transfer Mortgage

Can I product transfer early?

There was a time recently when rates started going up. We’re early now in March 2024 and when rates started rising you could only do a product transfer with the same lender about three months early – but you could re-mortgage to a new lender six months early as the offer would last longer.

So we were finding that everyone was remortgaging. No one was product transferring because we could get in six months early. With rates were going up, the earlier you got in with your remortgage, the better.

Lenders then cottoned on to the fact that all their customers were disappearing. Most of them changed their product transfer window to six months in advance. So now, you can usually do it.

When is a product transfer a good idea?

People often need to do product transfer because their situation has changed. Perhaps their income has changed – they may have gone self-employed or taken a pay cut. They may now have credit issues that would make it hard to move lenders.

You can always do a product transfer and stay with the same lender. They don’t ask any questions, so if you’re just changing rates with the same lender they won’t ask you about your income. That makes it an easier thing to do.

You can’t make any changes necessarily, but we don’t always want to make changes when we remortgage.

How long does a product transfer take?

It can be almost instant. Most lenders want it done a couple of weeks before the end of the month, to take effect the following month. We try and get people in early – ideally we try and do it six months in advance if we can. Then it can sit there and wait. You can do that with most product transfers now.

It can be done very quickly because there’s no questions asked. If you do it sooner, though, and rates go up, we’ve banked you a more cost effective deal. Some people worry about doing it too early in case rates come down. But if they do come down you can change the deal – most lenders let you do that nowadays.

How much does a product transfer cost?

A product transfer doesn’t tend to cost anything. There may be a reservation fee on the new rates that you choose – perhaps £999 – but most people will tend to add that to their mortgage and don’t count that as a cost. There are no other costs to consider.

There’s no solicitor involved because you’re staying with the same lender. There’s no valuation to be done. Your current lender will make an assumption about the value of your property based on what it was last time.

Let’s say two years ago you bought your property and valued it at a certain amount. They will use that to make an assumption on its value now. This can sometimes be a pain – if you’ve done loads of work to the property, the lender won’t know about that.

Say you put in a five or ten percent deposit when you bought two years ago but you’ve spent £50,000 making it better. It’s going to be worth more and so your Loan to Value and your equity will be better. So their assumption would be wrong.

If we can get them to value it higher that would potentially give you a better rate. We can do that with some lenders. We can disagree with the valuation and they’ll send a valuer round to check. But sometimes lenders will charge you for that valuation. If they’re going to do that anyway, you might be better off moving lenders – then you probably get a free evaluation.

If you change lenders, as long as you’re not changing the ownership of the property, there’s usually no solicitor fee – the lender pays it. There’s no valuation fee – the lender pays it because they want your business.

Do you need a credit check for a product transfer?

No, this is the beauty of product transfers. If you have fallen on hard times or had some blips since you took out the mortgage, you can stay with your lender.

As an example, if you took out a mortgage with Nationwide but since then you’ve defaulted on three of your credit cards, you will really struggle to take that mortgage away from Nationwide to another mainstream high street lender.

Providing you don’t need to make any changes to that mortgage it’s probably best just to keep that mortgage with Nationwide. They’re not going to check as long as the mortgage is up to date.

But if you are behind on the mortgage, they may well not offer you a product transfer. They may put you on the variable rate. It’s backwards – because you’re even more likely to not be able to afford it, but that’s a story for another day. Essentially, if you’re just doing a product transfer, there’s no credit check.

Can you cancel a product transfer?

Yes. So if we do one now, six months early, and then rates change, we can cancel and do a new one. Or we can cancel and remortgage. We can cancel up until a couple of weeks before the end date. We just need to give the system time to organise the new product.

How can a mortgage broker like Vantage help with a product transfer?

You should always use a mortgage broker, even if it’s just to check you’re doing the right thing. We can help you with a product transfer – we can do it for you on the system with most lenders.

Plus, we will compare that deal with remortgaging elsewhere, and we will keep an eye on it for you. If rates go down we will redo it. We’ll cancel the old one and set up a new one.

If you do a product transfer directly with your bank they won’t tell you if their rates have gone down, or that you could get a better deal now by changing product. You would have to keep an eye out for yourself. That’s a great reason to use a mortgage broker.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBTS SECURED ON IT.

You may have to pay an early repayment charge to your existing lender if you remortgage.