Remortgage or product transfer?

When your fixed or discounted deal ends, you have two main routes. A product transfer means moving to another fixed or tracker deal without switching lender or completing the full remortgage process¹. A remortgage means switching from one mortgage to another, either a new deal with your existing lender or a new mortgage with a different lender².

The difference matters most in three places: how much of the market you can see, how much paperwork and cost is involved, and whether you can borrow more. A product transfer is quicker and usually cheaper, but the main drawback is limited choice: you can only access the rates your current lender offers¹. A remortgage to a new lender opens up the wider market, but brings legal work, valuation and a fresh affordability assessment.

Do nothing and you will usually be moved automatically onto your lender's standard variable rate, which is usually much more expensive³. That is the outcome both routes are designed to avoid.

Product transfer or remortgage: what each one means

A product transfer is the simpler of the two. It involves moving to another fixed or tracker deal without switching lender or completing the full remortgage process¹. Because the lender already holds your mortgage, there is no new legal charge to register and no conveyancing. One lender describes it as a rate switch, and notes it is not quite the same as a remortgage⁸.

A remortgage is broader. It means switching from one mortgage to another, and that can be a new deal with your existing lender or a new mortgage with a different lender². When you move to a different lender, the old mortgage is repaid and a new one is registered against the property, which is why legal work is involved.

The practical difference is choice against effort. Staying put limits you to one lender's range¹. Moving lender means the whole market, but you take on the process: application, valuation, underwriting and completion.

There is a middle option worth knowing about. If you want to keep your current deal but move home, some mortgages can be ported, which means taking the loan with you. Porting has its own rules and affordability tests, and it is covered separately in porting a mortgage when you move home.

What happens when your deal ends: the move to SVR

If you take no action, the default outcome is automatic. When a discount period comes to an end, your lender will usually transfer you onto its standard variable rate automatically, meaning monthly repayments will increase⁹. The same applies to fixed rates: at the end of the fixed period you will need to remortgage, and if you do not, you will be moved to your lender's standard variable rate, which is usually much more expensive³.

The standard variable rate is the lender's own variable rate, and it is what you are usually moved to if you do nothing when your fixed rate ends¹¹. It is not a deal you choose; it is where you land.

The gap between a deal rate and a standard variable rate is the reason timing matters. A product transfer or remortgage arranged before the end date means you move straight from one deal to the next, with no period on the higher rate. Our page on what to do when your fixed rate ends sets out the sequence.

Costs of each route: arrangement, valuation and legal fees

The cost gap between the two routes comes from what each one requires.

A product transfer usually involves an arrangement fee set by your lender, and nothing else. There is no valuation for the lender's purposes in the usual case, no conveyancing, and no exit fee from your existing mortgage because you are not leaving it. Some lenders let you choose a new deal up to 3 months ahead, or switch at any time subject to any early repayment charges¹³.

A remortgage to a new lender adds legal work. You will need a solicitor or conveyancer to handle the transfer of your mortgage, though some lenders may offer this as a free service¹⁴. A valuation is normally required by the new lender, and there may be a booking or arrangement fee. Mortgage fees generally are worth checking line by line; our guide to mortgage fees and charges covers what each one is for.

There is one fee that catches people out. If your mortgage is a Help to Buy equity loan, there is a remortgage administration fee of £115 if you want to remortgage only, remortgage and transfer equity, or remortgage to make structural alterations¹⁵. That is a government charge, separate from anything the lender charges.

Early repayment charges: up to 5% in year one

An early repayment charge is a charge levied by the mortgage lender on the customer if the amount of the loan is repaid in full or in part before a date or event specified in the contract¹⁶. In plain terms, it is the price of leaving a deal early.

The size depends on the deal and the year. Early repayment charges can be hefty, potentially reaching 5% of the amount repaid in the first year of a mortgage deal⁵. They are usually charged as a percentage of the overall loan, and the percentage reduces over time¹⁷. For example, on a five-year fix the charge might be 5% of your mortgage balance in year one, 4% in year two, 3% in year three, and so on¹⁷. These fees can add up to tens of thousands of pounds¹⁷.

Real product terms show the same shape. One lender's five-year fixed product carries 5.0% to 31/01/2028, 4.0% to 31/01/2029, 3.5% to 31/01/2030, 2.5% to 31/01/2031 and 2.0% to 31/01/2032¹⁸. Shorter deals carry smaller charges: a two-year fixed product from the same lender carries 2.5% to 31/01/2028 and 2.0% to 31/01/2029¹⁸. Some products cap the total at 10.0%¹⁸.

The charge is calculated at the rate applicable for the year in which the repayment or transfer occurs, and is based on the amount repaid or transferred¹⁸. So the timing of the switch, not just the decision, sets the cost.

There is one way to sidestep the charge in some cases: a portable mortgage, which you can take with you when you move home⁵. Porting is not the same as a product transfer, and it has its own conditions. Our page on early repayment charges explains how they are worked out.

Timing the switch: start three to six months before your deal ends

The recommended window is consistent across lenders. It is recommended starting the process 3 to 6 months before your current deal is due to end to ensure a smooth transition⁴. One lender suggests looking into remortgaging two to six months ahead of your deal ending¹⁹, another says most people consider their options around 3 to 6 months before the current deal ends²⁰, and another recommends beginning around 3 months before the end of an existing deal²¹.

The reason for the long lead time is that a remortgage takes weeks, not days. The process typically takes from 4 to 8 weeks after you apply¹⁴, and can take up to two months following application²². One lender puts it at 6 to 8 weeks after your initial application²³. A remortgage offer is typically only valid for three months, though this varies between lenders¹⁵.

If you start early, you can often set up a deal with a new provider up to six months before the end of your current one²⁴. If you decide on a product transfer with your current lender, you can usually arrange this around four months before your fixed term ends²⁴. Some lenders allow a product switch up to three months ahead, or at any time subject to any early repayment charges¹³.

Affordability checks: when a product transfer avoids them

Often not, and this is one of its main advantages. If your situation is the same, you may not need any affordability checks²⁵. Another benefit, particularly in the current climate, is that you may avoid a fresh affordability check¹. As long as you are not applying to borrow more money, it should go through without the need for an affordability assessment²⁶.

The rule is not absolute, and it depends on your circumstances. Lenders have agreed in the past to allow customers who had taken mortgage payment holidays to make product transfers without requiring an affordability assessment²⁴. Borrowers in a debt management plan may find their lender agrees to move them to a new fixed-rate deal without completing an affordability check if the payments on the new deal would be lower and the term and borrowing are unchanged; this may be called a switch or product transfer²⁷.

The moment you ask to borrow more, the position changes. Porting to a more expensive property means you will need to pass your lender's affordability checks, and you may have to pay a fee to increase your loan, or take on another mortgage product at a different rate¹⁷. Even downsizing to a cheaper property with no extra borrowing means your lender will run an affordability check based on current lending criteria¹⁷.

A remortgage to a new lender always involves a fresh assessment, because the new lender is taking on the loan from scratch. Our page on how much you can borrow explains what lenders look at.

How long a remortgage takes

Lenders describe the same range. The journey can take an average of 4 to 8 weeks, beginning with checking your loan-to-value and ending with the loan completing⁴. The remortgaging process typically takes from 4 to 8 weeks after you apply¹⁴. One lender says the process can take up to two months following application²², and another puts it at 6 to 8 weeks after your initial application²³.

The clock starts when you apply, not when you first look. That is why the three to six month window exists: it leaves room for a valuation, underwriting, any queries, and the legal work if you are changing lender.

A remortgage offer is typically only valid for three months, though this varies between lenders¹⁵. If your deal ends sooner than that, the offer may expire before you can use it, which is one reason not to leave the application too late.

Borrowing more on a product transfer

You can ask, but the choice is limited. The main drawback of a product transfer is limited choice: you can only access the rates that your current lender offers¹. If you want to borrow more, that usually means affordability checks and possibly a fee to increase the loan, or a separate product at a different rate¹⁷.

Borrowing more on a mortgage is a distinct process, sometimes called a further advance. Our page on borrowing more on your mortgage sets out how lenders handle it. If the sum you need is large, comparing what your current lender offers against what a new lender would offer is the point of looking at both routes side by side.

Remortgaging when you owe more than your home is worth

This is difficult, because a new lender needs the property to cover the loan. If you sell and the sale price is more than the total you owe, the difference must be paid back to you²⁸. If the sale price is less than the debt, there is a shortfall, and that is a different problem.

If you are in negative equity, the realistic options narrow. Staying with your current lender and moving to a new deal may be the only route available, because a product transfer does not require the property to be revalued for a new lender's purposes. Our page on selling when in negative equity covers the position in more detail.

Switching from interest-only to repayment

In most cases you do not need to remortgage to make that change: your lender should be able to make the change for you⁸. Going the other way is harder. Switching from repayment to interest-only is much more difficult²².

If you are on an interest-only mortgage and want to move to repayment, the lender will recalculate your monthly payment to include capital. If you are remortgaging to a new lender at the same time, the new lender will assess affordability on the repayment basis. Our pages on interest-only mortgages and repayment mortgages explain how each works.

Do I need a solicitor to remortgage?

It depends on the route. If you are remortgaging with your current lender, you will not need a solicitor, as this is a product transfer and does not need extra legal work⁶. If you are sticking with the same lender and simply transferring to a different mortgage product, you may not need a solicitor, and the lender might simply consider your request a product transfer with minimal fees²⁹.

Remortgaging to a different lender is different. You will need to use a solicitor or a licensed conveyancer to remortgage with a different lender³⁰. You will need a solicitor or conveyancer to handle the transfer of your mortgage, though some lenders may offer this as a free service¹⁴.

Is it worth using a mortgage broker to remortgage?

A broker sees deals across lenders, including lenders that only sell through brokers, and handles the application. Whether that is worth the fee depends on how much of the market you would otherwise see and how much work you want to do yourself. Our page on mortgage advice and brokers explains the difference between advice and going direct.

One piece of guidance applies whichever route you take: always speak to your mortgage company about remortgaging first, as it is often a cheaper alternative³¹. That is not a recommendation, it is what the guidance says, and it reflects the fact that a product transfer avoids legal work and a fresh affordability assessment.

Where to get help

If you are struggling with payments, free and impartial help exists. StepChange, National Debtline and Citizens Advice all offer free debt advice, and your lender should discuss options with you before arrears build up. Our page on mortgage arrears sets out what to do if you cannot pay.

If you have a complaint about how a lender handled a remortgage or product transfer, you can take it to the Financial Ombudsman Service once you have been through the lender's own complaints process. Our page on complaining to the Financial Ombudsman explains how.