When your mortgage deal ends, you face a choice: take a new deal with your existing lender, known as a product transfer, or move to a different lender with a full remortgage. Each has pros and cons. This guide explains product transfer versus remortgage, so you can decide which is better for you.
What a product transfer is
A product transfer is a new deal offered by your current lender when your existing rate ends, without changing lenders. You stay with the same lender and simply move onto a new product, such as a new fixed rate. Because you are not switching lenders, the process is usually quicker and simpler, with less paperwork and often no new valuation or legal work required.
What a full remortgage is
A full remortgage means moving your mortgage to a different lender. The new lender pays off your old mortgage, and you continue with them on a new deal. This involves a full application and assessment, usually a valuation, and legal work to switch lenders, as our guide to remortgaging explained covers. It takes more effort than a product transfer but can open up the whole market of deals.
The advantages of a product transfer
A product transfer is convenient. It is usually faster and simpler, often with minimal paperwork, no new affordability assessment in some cases, and no legal fees or valuation costs. If you want a hassle-free switch and your lender's offer is competitive, a product transfer can be attractive. It is especially appealing if your circumstances have changed in ways that might make passing a new lender's checks harder.
The advantages of a full remortgage
A full remortgage lets you access the whole market, so you can find the most competitive rate rather than being limited to your current lender's offers. It also lets you change things, such as releasing equity, changing the term, or adding or removing a borrower. The potential savings from a better rate can outweigh the extra effort and any costs, especially on a larger mortgage.
Why your lender's offer may not be best
It is worth knowing that your current lender's retention or product transfer offer is not always their or the market's most competitive rate. Lenders rely on the convenience of staying put, so the easy option is not always the cheapest. Checking the wider market, yourself or through a broker, lets you compare your lender's offer against what else is available, so you can make an informed choice rather than simply accepting the easy deal.
When a product transfer makes sense
A product transfer can make sense when your lender's offer is genuinely competitive, when you value speed and simplicity, or when changes in your circumstances, such as income or credit, might make qualifying with a new lender harder. Because a product transfer often involves lighter checks, it can be a practical route for those whose situation has changed since they first took out their mortgage.
When a full remortgage makes sense
A full remortgage makes sense when a better rate is available elsewhere, when you want to release equity or change your mortgage in ways your current lender will not offer, or simply when the savings justify the extra effort. On a larger mortgage, even a small rate difference can add up to a significant saving, making the work of a full remortgage well worthwhile.
How to decide
To decide, compare your lender's product transfer offer against the best deals available elsewhere, factoring in any fees and the costs of remortgaging, as our guide to the cost of remortgaging explains. Weigh the saving from a better rate against the extra effort and cost of switching lenders. A broker can do this comparison for you, helping you see clearly which option leaves you better off.
Speed and paperwork compared
On speed and paperwork, a product transfer usually wins. Because you stay with the same lender, there is often little paperwork, no need to switch the legal charge on your property, and a quick switch onto the new deal. A full remortgage involves a fresh application, a valuation and legal work, so it takes longer. If simplicity matters most to you, the product transfer is the easier route.
Affordability checks compared
Affordability checks can differ. A product transfer may involve lighter checks, since the lender already holds your mortgage, which can help if your circumstances have changed. A full remortgage means a new lender assessing your income, outgoings and credit afresh. If your finances are weaker than when you first borrowed, a product transfer can be more straightforward, while strong finances open up the whole market on a remortgage.
Costs compared
On cost, a product transfer is often cheaper upfront, typically avoiding valuation and legal fees and sometimes carrying a lower product fee, as our guide to the cost of remortgaging explains. A full remortgage may involve more fees, though many deals include free valuations and legal work. The real comparison, though, is the total cost including the interest rate, not just the upfront fees.
Flexibility compared
A full remortgage offers more flexibility, letting you change lender, release equity, alter the term, or add or remove a borrower. A product transfer generally just moves you to a new rate with the same lender, on the same mortgage. If you want to change your mortgage in some way, a remortgage gives you the scope to do so, while a product transfer is best when you simply want a new rate.
A simple way to choose
A simple way to choose is to get your lender's best product transfer offer, then compare it against the best deals available elsewhere, factoring in any fees. If the saving from switching outweighs the extra effort and cost, remortgage; if your lender's offer is competitive and you value simplicity, transfer. A broker can do this comparison for you, making it easy to see which option leaves you better off.
Neither is always right
Neither option is automatically the better one; it depends on your priorities and circumstances. The convenience and lower cost of a product transfer suit some people, while the wider choice and flexibility of a full remortgage suit others. The important thing is not to accept your lender's offer without comparing it to the market, so that whichever route you take, you do so knowing it is genuinely a good deal for you.
As a rule of thumb, treat your lender's product transfer offer as the benchmark to beat rather than the answer, and let the size of any saving elsewhere, set against the extra effort, decide whether staying put or switching lenders is the smarter move for you this time.
In short
A product transfer keeps you with your current lender on a new deal, and is quick and simple with minimal cost. A full remortgage moves you to a new lender, taking more effort but opening up the whole market and letting you change your mortgage. Your lender's offer is not always the cheapest, so compare it against the market, weigh the savings against the costs, and choose the option that leaves you better off.
Where to get help and next steps
Read our guides to how remortgaging works and how much remortgaging costs. Our guide to switching lender versus staying put is also worth a read. This is general information, not mortgage or financial advice.