Product Transfer

Following changes to building safety guidance after the Grenfell Tower tragedy, mortgage lenders may request additional information about the construction of some residential buildings before making a lending decision.

This may apply to certain multi-storey residential buildings where external wall systems could contain combustible materials.

In some cases, these additional checks may affect the availability of mortgage lending for properties within those buildings.

External Wall System (EWS1) Forms

The Royal Institution of Chartered Surveyors (RICS) introduced the External Wall System (EWS1) form in 2019.

The EWS1 form is used by valuers to provide information to mortgage lenders about the external wall construction of a building following an assessment by a suitably qualified professional.

An EWS1 form is not a legal requirement and is not needed for every building.

Whether an EWS1 assessment is required will depend on the characteristics of the building and the criteria of individual mortgage lenders.

EWS1 assessments are typically commissioned by the building owner, managing agent or freeholder rather than individual leaseholders.

Where completed, an EWS1 form is generally valid for a period of five years, although this may vary depending on individual circumstances.

Mortgage Options

If you are unable to move your mortgage to a new lender due to building-related lending restrictions, you may have the option of moving to a new mortgage product with your existing lender.

This is known as a Product Transfer.

Product availability and lender requirements will vary depending on your individual circumstances.

You may wish to seek mortgage advice to understand the options available to you.

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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.

Please see table below for examples.

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

NOTE: Product Transfer may not be the only option.

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Censeo Financial is a trading name of Censeo Ltd who are an Appointed Representative of PRIMIS Mortgage Network, a trading name of First Complete Ltd. First Complete Ltd is authorised and regulated by the Financial Conduct Authority for mortgages, protection insurance and general insurance products. Censeo Limited is registered in England and Wales, company registration number 06453977, the Registered Address 11b Newton Court, Pendeford Business Park, Wolverhampton, WV9 5HB.

We will charge a broker fee of up to £495, payable on application. The amount we will charge is dependent on the amount of research and administration that is required.

Your home may be repossessed if you do not keep up repayments on your mortgage.

The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.

Most Buy to Let Mortgages are not regulated by the Financial Conduct Authority.