Product transfers: switching deal with your lender

A product transfer is a switch to a new mortgage deal with the lender you already have. Newcastle Building Society describes it as changing your current mortgage product to a new one with the same lender¹, and Which? explains that it involves moving to another fixed or tracker deal without switching lender or completing the full remortgage process². Atom bank uses the same idea in its own words: switching with it, also known as a product transfer, allows you to secure a new mortgage deal without applying to another lender³.

The attraction is simplicity and cost. Product transfers often involve no legal or mortgage fees², usually need no valuation and no solicitor, and frequently go through without a fresh affordability check, as long as you are not borrowing more money⁴. Most lenders let you choose the new deal up to three months before your current one ends, so the new rate can take over the day the old deal expires, with no gap on the standard variable rate.

What a product transfer is: a new deal with the lender you already have

A product transfer sits between doing nothing and a full remortgage. Remortgaging, in the broad sense, means switching from one mortgage to another, either a new deal with your existing lender or a new mortgage with a different lender⁷. A product transfer is the first half of that: the lender stays the same, the property stays the same, the amount you owe stays the same, and only the deal attached to the loan changes.

That is why the process is lighter. There is no conveyancing, because the lender already holds the charge over the property. There is usually no valuation, because the lender already knows the property it is lending against. And because you are not asking to borrow more, the lender is often prepared to move you to the new deal without reassessing whether you can afford it⁴. Which? notes that product transfers can also save on costs, as they often do not involve legal or mortgage fees².

The trade-off is choice. The main drawback of a product transfer, as Which? puts it, is limited choice: you can only access the rates that your current lender offers². A full remortgage opens the whole market, but brings valuation, legal and possibly broker costs with it. The dedicated comparison page on remortgage or product transfer sets the two routes side by side.

A product transfer can also be combined with extra borrowing. Virgin Money describes a version where you switch your existing mortgage to a new product and take additional borrowing at the same time, on the same terms and conditions as the new product⁸. That is a bigger step than a straight switch, and it changes what the lender will want from you, as covered under affordability below. If you are moving home rather than staying put, the related process is porting a mortgage, which is a different thing entirely.

Who can switch: expiring deals, payment records and arrears

The most common trigger is an expiring deal. When a fixed rate or tracker period ends, the borrower who does nothing slides onto the lender's standard variable rate, which is usually higher. A product transfer is the standard way to avoid that. Borrowers already on the standard variable rate can usually switch too, since there is no deal-end date to work around, though the terms offered are a matter for each lender.

Payment record matters. Under the Mortgage Charter, customers who are up to date with payments can switch to a new mortgage deal with their lender at the end of their existing fixed-rate agreement without a new affordability check⁶. The House of Commons Library briefing sets out this commitment, and TSB publishes it as part of its own charter pledges⁶. The protection runs with the payment record, not with the borrower's history before that.

Borrowers in arrears are in a different position. StepChange, the debt advice charity, reports that its clients with mortgage arrears remain ineligible to move to a more affordable deal, either with their current lender or another provider, because of the up-to-date payments condition¹⁰. That is a significant gap in the charter's coverage, and it is one reason the charity argued for wider access to switching. If you are in arrears, the pages on mortgage arrears and the Mortgage Charter explain the options, and free debt advice is available from charities such as StepChange and National Debtline.

There have been temporary exceptions. During the pandemic, UK Finance confirmed that banks and building societies collectively agreed to allow customers who had taken mortgage payment holidays to make product transfers without requiring an affordability assessment¹¹, and a restriction was temporarily lifted so that the 1.8 million mortgage holders taking a payment deferral as at 21 May 2020 could take out a product transfer¹². Those arrangements were specific to that period, but they show that lenders can relax the normal rules when circumstances warrant it.

Borrowers with older credit problems but a clean mortgage record may still have options. National Debtline's guidance on debt management plans notes that a lender may agree to move a borrower to a new fixed-rate deal without completing an affordability check if the payments would be lower and the term and borrowing are unchanged, and that this may be called a switch or product transfer¹³. The page on getting a mortgage with bad credit covers the wider picture.

When to switch: usually up to three months before your deal ends

Timing is the question most borrowers ask first: how early can you lock in a new rate? The answer for most lenders is around three months. Precise Mortgages states you can switch products up to three months before your existing deal is due to end without the need for another affordability check⁵. TSB says the same: you can switch to a new mortgage deal up to 3 months before your current deal ends with no credit or affordability checks⁹. Suffolk Building Society and Dudley Building Society both publish three-month windows for products due to expire¹⁴, and Suffolk adds that switching within that window avoids an early repayment charge¹⁴.

Not every source agrees on the exact figure. Which? reported in 2020 that if you decide on a product transfer with your current lender, you can usually arrange this around four months before your fixed term ends¹¹.

Switching earlier than the window is possible but usually costly. Dudley Building Society notes you could choose a new deal up to 3 months ahead, or switch at any time subject to any early repayment charges¹⁵. Those charges are explained on the early repayment charges page. The narrow guide on how far ahead you can lock in a rate covers the wider market, including booking a deal with a new lender before your current one ends.

Fees and charges: usually no legal or valuation fees

The cost advantage is the main reason product transfers are popular. Which? notes that product transfers often do not involve legal or mortgage fees², and Yorkshire Building Society's guidance is blunt about the legal side: there are no legal fees¹⁶. Halifax lists no legal or valuation fees to pay for existing customers switching to a new deal¹⁷, and Cumberland says the same about its product switch¹⁸. The Co-operative Bank confirms no legal fees where only the mortgage product is being changed¹⁹.

Valuations are usually skipped too. Yorkshire Building Society says you may not need a valuation¹⁶, and The Tipton spells out what its process avoids: no underwriting, no credit searches, no valuation fee, no solicitor fees, and no bank statements, payslips or P60 required²⁰. Nottingham Building Society describes the product transfer route as often the quickest, requiring minimal paperwork and typically avoiding valuation and legal fees²¹. Which?'s remortgaging guidance makes the same point: you will not need a new credit check or a valuation, and you may be able to avoid expensive arrangement fees²².

Some lenders charge nothing at all. Family Building Society states that for all of its mortgage products there is no fee for product transfers²³, and Aldermore says there is no valuation, solicitor or product fee to pay on its product switches²⁴. Others do charge a product or arrangement fee on some deals, so the fee position depends on the deal you pick as much as the lender you are with.

Where there is a product fee, you often have a choice about how to pay it. Suffolk Building Society says its product switch fee can either be paid upfront before the switch is completed, or added to your mortgage balance¹⁴. Adding it is not free money: Virgin Money states that if you add the fee to the mortgage, you will pay interest on it at the same rate as the rest of your borrowing⁸, and Which? warns that adding a fee to the balance means you pay interest on it, costing you far more overall²⁵. The general page on mortgage fees and charges explains the fee types.

Affordability and credit checks are often skipped

This is where a product transfer differs most from a remortgage to a new lender. Which? notes a particular benefit is that you may avoid a fresh affordability check², and its reporting on lender practice during 2020 was more definite: as long as you are not applying to borrow more money, a switch should go through without the need for an affordability assessment⁴. TSB's charter wording gives the same assurance for borrowers up to date with payments at the end of a fixed rate⁹.

The reason is logical rather than generous. The lender is already exposed to the loan, the borrowing is not increasing, and a new deal that keeps payments manageable does not add risk in the way new lending would. The Mortgage Charter commitment turns that logic into a published rule for participating lenders⁶. Precise Mortgages applies the same principle to its own switches up to three months before a deal ends⁵.

The exceptions matter. Borrow any more, even alongside the switch as Virgin Money's additional borrowing product transfer does⁸, and a full affordability assessment is back on the table. The same applies where the payment record is not clean: StepChange's clients in arrears remain ineligible to switch to a more affordable deal under the up-to-date payments condition¹⁰. And a switch that changes the structure of the loan, rather than just the rate, can pull in the full advice and affordability rules: under the FCA's Mortgage Conduct of Business rules, where a firm proposes to vary the term of a regulated mortgage contract so that it becomes a retirement interest-only mortgage, the rate switch rules apply as though references to a rate switch were references to such a contract variation²⁶. The page on retirement interest-only mortgages covers that route.

The FCA has also worked to remove barriers in related areas. In October 2020 it published a policy statement on mortgages entitled "removing barriers to intra-group switching and helping borrowers with maturing interest-only and part-and-part mortgages"²⁷, which eased switching between lenders within the same group, a situation covered on the page about when your mortgage is sold to another lender.

A solicitor is not usually needed

Because the property and the legal charge over it are unchanged, there is no conveyancing to do. Suffolk Building Society states it directly: switching your mortgage product with it does not require the services of a solicitor¹⁴. The Tipton's product transfer process lists no solicitor fees among the costs its existing borrowers face²⁰, and The Co-operative Bank confirms no legal fees where only the mortgage product is being changed¹⁹.

This is a real saving compared with a remortgage to a new lender, where legal work is needed to move the charge from one lender to another, and where the borrower usually pays for it. Halifax's no legal or valuation fees position for existing customers switching deals¹⁷ is the same saving expressed from the lender's side. The contrast with buying a home is stark: on a purchase, official guidance such as the Scottish Government's shared equity leaflet tells buyers they will have to appoint a solicitor to act on their behalf to complete the work involved²⁸.

A solicitor does come back into the picture if the switch is bundled with something that changes the property or its ownership: moving home, adding or removing a borrower, or transferring equity. Those situations are covered on the joint ownership and separation and porting pages. A straight rate switch needs none of it.

How to apply: online, by phone or through a broker

The application routes are the same as for mortgages generally, but lighter. Yorkshire Building Society says you can usually perform a product transfer online or over the phone¹⁶. The Building Societies Association's consumer guidance makes the general point that you can apply for a mortgage direct to a building society or other type of lender, or alternatively use a regulated mortgage broker to help you²⁹. The same choice applies to transfers: direct with the lender, or through a broker who can also tell you whether the lender's deal is competitive against the rest of the market.

A typical run through the process looks like this:

1. Watch for the reminder. Lenders write to borrowers before a deal ends, often several months ahead. Check the end date on your annual mortgage statement.
2. Check the early repayment charge position. Switching inside the current deal can trigger a charge; inside the last three months it usually does not¹⁴.
3. Compare the lender's offer with the market. The lender's own deals are the only ones available on a transfer², so a broker or the lender's own quotes tell you whether a full remortgage would pay for its extra costs.
4. Choose the deal and route. Online or by phone with the lender direct, or through a broker¹⁶.
5. Decide how to pay any product fee. Upfront, or added to the balance where the lender allows, knowing interest will be charged on it⁸.
6. Accept the offer. The new deal is normally timed to start as the old one ends, so there is no gap on the standard variable rate.

The page on mortgage advice: brokers, advisers and applying direct explains the difference between advised and execution-only routes, and how to apply for a mortgage covers the full application process for new lending.

Advice, execution-only switches and FSCS protection

Many product transfers are done execution-only: the lender or broker processes your choice without recommending it, and the responsibility for picking a suitable deal sits with you. That is workable for a straightforward rate switch, but it means no one is checking whether the deal fits your plans, for example if you intend to overpay heavily, move home soon, or borrow more later. The pages on overpaying your mortgage and mortgage terms and extensions cover situations where the right deal depends on your intentions.

Where advice is given and something goes wrong, protection exists. FSCS protects mortgage advice³¹. Its consumer leaflet draws the boundary clearly: whilst we cover the advice, we do not cover the lending or administration costs on the mortgage itself³². So a failed adviser who recommended an unsuitable deal can give rise to an FSCS claim, but losses flowing from the mortgage itself, such as the cost of the loan or its administration, are outside that cover. Some mortgage-related claims are treated as investment claims, a category FSCS has protected since 28 August 1988³³.

The rules also recognise that some switches need more protection than a simple rate change. The FCA's handbook rule quoted above applies the rate switch protections to variations that turn a mortgage into a retirement interest-only mortgage²⁶, which means a borrower making that move is entitled to the same disclosure and suitability treatment as a borrower switching rates. If a transfer is refused or handled badly, the complaint route is the lender first and then the Financial Ombudsman, and the general page on mortgage rules, your rights and protection sets out where you stand.