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A product transfer is a new deal with the lender you already have, on the mortgage you already have. A remortgage is a new mortgage with a different lender that pays off the old one. When a fixed rate is ending, the product transfer is always my first check, because it avoids solicitor fees, usually needs no valuation and can complete in days. Whether it is the right answer is a separate question, and that is what the rest of this guide is about.
What a product transfer actually is
You stay with your current lender and move from the rate you are on, or the standard variable rate you are about to land on, onto a new rate from that lender’s current range. The loan amount, the term and the property all stay the same. Because nothing else changes, most lenders do not run a full affordability assessment, do not need a new valuation and do not involve a solicitor. Under the FCA’s rules a like-for-like switch with no extra borrowing can use a simplified affordability check, and under the Mortgage Charter that most lenders signed in 2023 you can lock in a new rate up to six months before your current one ends and still switch to a cheaper one if it appears before the start date. If you want to borrow more, change the term or move from interest-only, it stops being a straight product transfer and the lender will assess you properly.
The product transfer is always the first check because it avoids legal and valuation costs and completes in days.
A remortgage means a full application with a new lender, but it opens up the whole market.
The right answer is the one that costs least over the period you are fixing for, fees included.
Why I always check the product transfer first
It sets the benchmark. Your current lender’s offer is the deal you can have with almost no cost and almost no effort, so every alternative has to beat it after fees, not just on the headline rate. It also protects you: if your circumstances have changed since you took the mortgage, through a job change, a new child, or a knock to your credit file, a product transfer is often available when a fresh application elsewhere would not be. And it removes the timing risk of a chain of paperwork between two lenders and a solicitor while your old rate ticks towards the standard variable rate. None of that means it wins. It means it is the number everything else has to beat.
When a remortgage beats the product transfer
When the saving on the rate over the fixed period is bigger than the cost of moving. A remortgage typically involves a valuation, legal work and sometimes an arrangement fee, though many lenders offer free valuation and free legals on remortgage products, which narrows the gap. If another lender is meaningfully cheaper on a like-for-like basis, the saving on a £200,000 balance over five years can comfortably outweigh a few hundred pounds of costs. A remortgage also makes sense when you want something your current lender will not give you: extra borrowing on better terms, a longer or shorter term, a switch from interest-only to repayment, or a product type your lender does not offer. My remortgage page covers the process in detail.
The costs on each side
A product transfer normally has no legal fee and no valuation fee. It may carry an arrangement fee on the new rate, as any product might, and the choice is limited to one lender’s range. A remortgage may involve an arrangement fee, a valuation fee, conveyancing and your old lender’s exit or deeds release fee, offset by any free legals or cashback the new lender offers. The comparison that matters is total cost over the fixed period: monthly payment multiplied by the months, plus all fees, on each option. I put that side by side for every client, because a lower rate with a big fee often loses to a slightly higher rate with none on a smaller balance.
Timing: the six month window
Most lenders let you secure a new product transfer rate up to six months before your current deal ends, and you can usually swap to a better rate from the same lender if one appears before the switch date. Remortgage offers also last around six months, so the practical approach is to start the conversation about six months out, secure the product transfer as a fallback, and compare the whole market in the meantime. That way you are never forced onto the standard variable rate while the paperwork catches up. My guide to early repayment charges explains what happens if you try to move before the fix ends.
Speak to an expert
Your fixed rate ending in the next six months? Send me your current lender’s product transfer offer and I will tell you within a day whether the market beats it after fees.
Does a product transfer affect my credit file?
Usually not in the way a new application does. Most lenders do not run a hard credit search for a like-for-like product transfer, because the risk they are taking has not changed. A remortgage with a new lender involves a full application and a hard search. If your credit file has taken a knock since you bought, that difference can decide the route on its own, and my guide to how your credit score affects a mortgage covers what lenders see.
Product transfer for buy to let
The same logic applies to landlords, with one difference: a buy to let remortgage to a new lender means a fresh rental stress test at today’s rates, which some properties bought years ago at lower prices no longer pass comfortably. A product transfer sidesteps that. I have written separately about product transfer versus remortgage for buy to let.
So which one should you choose?
The one that costs least over your fixed period once fees are included, provided it gives you the features you need. For some people that is the product transfer, for others it is a remortgage that saves far more than it costs. It comes down to your balance, your lender’s offer, your circumstances and what the market is doing that month, and working that out is exactly what an advice appointment is for. Call me on 01425 203055 or book a 15 minute call and I will run both sets of numbers for you.
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.
