Remortgage or Product Transfer | Mortgage Advisor Discussion

Let’s Talk Money and Mortgages

Introduction

Gemma: Hello and welcome back to our channel and podcast! My name is Gemma, and here at WIS, we talk about money, mortgages, and positive money mindset.

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Today’s episode is all about the difference between remortgaging and a product transfer, and when you should use each.

We are joined by Ifthi, a trained accountant and mortgage advisor with over 11 years of experience, and also one of the founding directors at WIS.

Welcome back, Ifthi! How are you today?

Ifthi: Hi, I’m very well, thank you.

Gemma: I’m very good, thanks!

Q1: What is remortgaging?

Ifthi: Remortgaging happens when your mortgage deal comes to an end.

Most people take a two-year or five-year deal.

If you do nothing when the deal ends, your mortgage reverts to the Standard Variable Rate (SVR).

The SVR is usually much higher, sometimes double your previous rate.

Example:

You are paying 2% interest during your deal.

Without remortgaging, your rate may jump to SVR at 4–5% or more.

Solution:

Remortgaging lets you move to a new deal, either with the same lender or a different lender, often saving money.

Q2: What is a product transfer?

Ifthi: A product transfer happens when your deal ends but you stay with the same lender.

The lender offers a new mortgage deal for another two or five years.

Unlike a remortgage, you do not switch lenders.

Key difference:

Remortgage: move to a new lender.

Product transfer: stay with the current lender with a new deal.

Q3: Why would someone choose to stay with their current lender?

Ifthi: There are a few main reasons:

Ignorance / Lack of awareness:

Some people don’t know they can switch lenders and assume they must stay.

Convenience:

Staying with the same lender involves less paperwork.

Better rate incentive:

Sometimes the lender offers a competitive deal to encourage you to stay.

Changed personal circumstances:

If your income has dropped or circumstances changed, you may get a better chance with your existing lender, because they know your track record.

Gemma: So it’s always a good idea to review your situation and compare options before deciding, right?

Ifthi: Absolutely. Even with reduced income, there may be other lenders willing to offer competitive rates, sometimes up to 5–6.5 times your income. Always consult an advisor before deciding.

Q4: Is paperwork a big barrier for remortgaging?

Ifthi:

Some people assume remortgaging is a lot of paperwork, but it’s usually manageable, especially if you use the same broker.

Brokers check your documents to ensure the deal is right for you.

Straightforward remortgages often involve less paperwork than your original mortgage.

Gemma: What about capital raising or borrowing extra money?

Ifthi:

That may require additional underwriting and paperwork, but for a standard remortgage, the process is simple.

Q5: What factors should you consider when comparing costs?

Ifthi: Interest rate alone is not enough. Consider:

• Product fees: e.g., £2,000 product fee vs. £1,000 at another lender.
• Legal and valuation fees: often included as incentives.
• Exit fees or early repayment charges.
• Overall cost: advisors calculate the cheapest overall cost for two-year or five-year deals.

Gemma: So even small differences in product fees can affect the overall cost significantly.

Ifthi: Exactly. Sometimes fees can be rolled into the mortgage, which changes the overall calculation.

Q6: Are legal fees and valuations required?

Ifthi:

Product transfer: usually no solicitor needed, because you are staying with the same lender.

Remortgage: some solicitor work is required to move the mortgage or charge between banks, but often the bank covers it as free legal or cash back.

Gemma: Can clients use their own solicitor instead of the bank’s free legal service?

Ifthi:

Yes, if the bank offers cashback.

Some clients prefer their own solicitor for peace of mind.

If you don’t use the bank’s service and want your own solicitor, you cover the cost yourself.

Gemma: So overall, the process is streamlined, especially with digital portals and online solicitor services.

Conclusion

Gemma:

Always review your mortgage situation before deciding on a product transfer or remortgage.

Consider overall costs, personal circumstances, and risk.

Consult an advisor to ensure the decision is right for you.

⚠️ A mortgage is secured against your home or property and may be repossessed if you do not keep up with repayments.

Thank you for joining us today! We’ll be back next week with another episode of Let’s Talk Money and Mortgages.