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A product transfer moves you onto a new deal with your existing lender, usually with little or no fresh affordability check. A remortgage moves you to a new lender, and that means a full new application, including the buy to let stress test. For landlords, that difference in underwriting, not just cost or speed, is usually what decides which one actually makes sense.
A product transfer usually skips a fresh affordability check; a remortgage always runs one.
The buy to let stress test uses an Income Coverage Ratio, broadly 125% to 170% depending on tax status.
A remortgage can restructure the loan, release equity, or move it into a limited company; a product transfer can't.
A remortgage typically brings a new valuation fee and legal costs; a product transfer usually avoids both.
A broker can check both routes, including whether a remortgage would actually pass, before recommending either.
How HTG Mortgages Can Help
I look across the whole market rather than one lender’s range, so the question I am answering is not which of my products fits you, it is which of the 120 or so lenders I work with will take the most sensible view of your rent, your ownership structure and the rest of your portfolio. That matters more on buy to let than it does on a residential mortgage, because lenders differ a lot in how hard they stress the rent and what they will accept as proof of it. My fee is a flat £350, payable when your mortgage offer comes through, with nothing to pay upfront. You can see how that works on my fees page, or read more about the service on my buy to let remortgage page.
What’s the difference between a product transfer and a remortgage?
A product transfer is a straightforward switch to a new rate with the lender already in place. The existing loan, valuation on file and case history stay largely as they are, so many lenders don’t re-run a full affordability assessment. A remortgage is a new application, with a new lender or the same one, which means new underwriting from scratch: a fresh valuation, fresh income and rental checks, and the current stress test applied as if borrowing for the first time.
Do I need to pass affordability checks again for a product transfer?
Usually not, or not to the same depth as a full application. This is the part landlords tend to miss. Where rental income, personal income, or the wider lending rules have moved since the mortgage was first taken out, staying with the existing lender on a product transfer can mean keeping lending that a new lender might not offer today. That’s not a reason to default to product transfer every time, but it is a reason to check before assuming a remortgage is automatically the better move because the headline rate looks better elsewhere.
How does the buy to let stress test actually work?
Lenders test rental income against a notional interest rate higher than what’s actually being paid, then check it clears a set percentage of the mortgage payment, known as the Income Coverage Ratio (ICR). As a general guide: basic rate taxpayers and limited company borrowers are typically assessed at 125% ICR, higher rate taxpayers in a personal name at 145%, and additional rate taxpayers can be tested as high as 170%. These thresholds sit within Bank of England prudential regulation, so they apply broadly across the market, though the exact notional rate used to stress-test can differ by lender and by product type. A product transfer with the existing lender can sometimes use a lower stress requirement than a fresh application, which is exactly why it’s worth checking both routes rather than assuming.
When does a remortgage make more sense than a product transfer?
When the numbers still stack up on a full reassessment, and the market elsewhere genuinely offers better terms than staying put, a remortgage can be worth the extra work. It’s also the right route where releasing equity, changing the mortgage structure (for example, moving a property into a limited company), or consolidating borrowing across a portfolio is the goal. A product transfer generally can’t do any of that; it’s a like-for-like switch, not a restructure.
Speak to an expert
Whether you’re buying your first home, moving house or remortgaging, HTG Mortgages is here to make the process as simple and stress-free as possible. I’ll compare mortgages from over 120 lenders, guide you through every step, and make sure you understand exactly what you’re signing up for.
What does a product transfer cost compared with a remortgage?
A remortgage typically brings a new valuation fee, legal costs (even where a lender offers a ‘free legals’ package, someone still has to do the conveyancing work), and a full application. A product transfer usually avoids all of that, since there’s no new lender, no new legal charge to register, and often no new valuation. That’s the trade-off in a sentence: a remortgage can win on rate or structure, a product transfer usually wins on cost and certainty.
Can I still use a broker for a product transfer?
Yes. Product transfers are often sorted directly with the lender because it’s ‘just staying put’, but a broker can still check whether the existing lender’s product transfer range is genuinely competitive against the wider market, and just as importantly, check whether a fresh remortgage application would actually pass before recommending a move away from a route that doesn’t require one.
What if I want to release equity as well?
A product transfer, by its nature, keeps the loan amount the same, so it can’t release equity. Where capital raising is part of the plan, a remortgage or a further advance from the existing lender is the route instead, and that brings the full affordability check back into play regardless of which lender is used.
How long does each option take?
A product transfer can often be arranged in a matter of days, sometimes agreed online directly with the existing lender. A remortgage takes longer, typically several weeks once valuation, underwriting and legal work are included, so timing against the current deal’s end date matters either way.
What I see most often
The pattern I see most often isn’t really about which option looks cheapest on paper. A product transfer isn’t automatically the cheaper route, sometimes a remortgage genuinely works out better once the full picture is checked. But for landlords whose rental income has got tighter against today’s stress test, a product transfer can be the only route that keeps the borrowing available at all, even if it isn’t the best rate elsewhere. Which one actually suits a given situation depends on the individual numbers, which is exactly what checking both properly is for.
The rates lenders offer here move partly on the same swap rates that react to inflation news, including July’s UK inflation figures.
And if your bigger question is whether the property should sit in a company at all, my guide to transferring a property into a limited company covers what that move really costs.
Need Personal Mortgage Advice?
Every buyer’s situation is different. While this guide explains the general rules, the right mortgage for you depends on your income, deposit, credit history and future plans. If you’d like tailored advice, I’m here to help, with whole-of-market coverage.
