Mortgage Review

Re-mortgaging is the process of switching your existing mortgage to a new mortgage product, usually for a better interest rate, using the same property as security. You can re-mortgage with the same lender or a different provider – you’re not moving home, and your new mortgage will still be secured against your existing property. 

You may possibly have come to the end of your fixed rate term, or you may be on a higher interest rate and the mortgage rates have reduced and want to consider your options. We are here to help.

A re-mortgage could help you:

• save money on your monthly mortgage payments
• reduce the term of your mortgage for a similar payment
• buy more shares in your home (staircase)
• allow you to borrow some money for home improvements (although this will need your landlord’s approval). Your landlord is unlikely to approve debt consolidation. 

What is a Product Transfer mortgage?

A Product Transfer is when you move from your existing mortgage deal to a new one with your current lender. While it is not a new concept, a Product Transfer is a lesser-known option which may be a better alternative to Re mortgaging.

Once your fixed rate has ended, you are on your lender’s SVR, potentially resulting in your payments increasing. You may have the option of moving to another more favourable rate with your existing lender.

Assuming you want to keep your loan amount the same and are happy with your current lender, this would be classed as a Product Transfer because you’re just moving from one product to another, and the savings could be substantial.

What is the process for a Product Transfer?

The Product Transfer process is usually very straightforward. This is because a formal valuation on your property is not necessary as you are not Remortgaging or requesting additional borrowing.

Product Transfers can usually be quickly arranged with your mortgage advisor or lender.

Homeowners may be subject to an affordability check which would involve completing an income and expenditure form. However, most high street lenders do not require this to be carried out with standard Product Transfers. Once this has been completed, provided the credit check is approved (if applicable), the borrower will be provided with a Product Transfer document to sign. A handful of lenders may also require a re-evaluation of proof of income, but many do not.

Many lenders use property valuation software which return results very quickly, meaning that the whole process can potentially be completed in as little as a week.

What’s the difference between Product Transfers and Remortgaging?

As covered, a Product Transfer is typically a simple process involving switching from one mortgage product to another with your existing lender.

On the other hand, if you decide that you want to borrow more money, this would be classed as a “Further Advance” if you stay with your current lender, or a Remortgage if you decided to move to a new lender at a different rate.

When it comes to Remortgaging, Further Advances, or any other form of ‘non-standard’ Product Transfer (eg. extending the terms of your mortgage), the process involved is more extensive. It will usually require a full Mortgage Valuation and additional legal work, as well as the usual credit checks and affordability assessments.

Advantages of a Product Transfer

The main advantages of a Product Transfer over the alternatives are:

• In most cases you will not be subject to a full valuation
• There are not usually any legal steps or fees to pay
• Fewer fees overall due to fewer stages and people involved in the process
• Less paperwork to fill out
• Cheaper rates
• No other options due to cladding