Mortgages: Product transfer vs Remortgage

When your current mortgage comes to an end, you need to decide product transfer vs remortgage.

Remortgaging is when you source a new mortgage with a different mortgage lender. Product transfer on the other hand is when you stay with your current lender and negotiate a new deal with them.

Deciding which one is right for you, really depends on a number of factors but it is certainly worth investigating all the options available to you.

According to the UK Finance’s household finance review, product transfer volumes were four times higher than remortgage transactions in the final quarter of 2020.

One of the main reasons why individuals choose product transfer is because lenders rarely do affordability checks on these whereas with remortgages they do. Therefore a client who may have had a reduction in income or been furloughed may find that remaining with their current lender is their best or only option.

Millions of households are potentially wasting money every month, when they could remortgage with another lender or get a better rate with their current mortgage provider.

The product transfer option

If you choose the option of product transfer vs remortgage then there is certainly a lot less paperwork! As we mentioned earlier, this could also be a great option if your circumstances have changed since you took out your last mortgage. Factors such as a new job, going self-employed or being furloughed could restrict your options with a new lender so staying with your current provider would make sense.

The remortgage option

The other option available to you when your current deal comes to an end is to remortgage. A new lender needs to persuade you to leave your current lender and this usually takes the form of a lower rate of interest than you are currently paying. This will result in your monthly payments being less and will mean you can save money over the term of your mortgage.

When remortgaging the new lender will look into your personal and financial circumstances as well as having your property valued. This can take time and disputes may arise if the value of your property has changed. Read our other blog ‘what happens if I don’t remortgage‘ here.

Whether you choose a product transfer or remortgage, we can help you with this process. A mortgage broker will discuss all the options available to you and guide you through the process. Our advice and extensive market knowledge is guaranteed to find the best mortgage deal for you.

If you are interested in discussing how we can help you find the best mortgage deal then please get in touch.

*Please note your home maybe repossessed if you do not keep up repayment on your mortgage.

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