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A remortgage usually means moving your mortgage to a new lender, which pays off your existing one and starts a new loan. A product transfer keeps your mortgage with your current lender and simply moves you onto a new deal for broadly the same balance. Both can help you avoid your lender’s standard variable rate (SVR) when a fixed or tracker deal ends, but the process, checks and choice of deal differ.
What’s actually different between the two?
The core difference is who you deal with and how much is reassessed.
| Product transfer | Remortgage to a new lender | |
|---|---|---|
| Lender | Stays the same | Changes |
| Choice of deals | Limited to what your current lender offers | The whole market you’re eligible for |
| Affordability assessment | Not required under FCA rules where you’re not borrowing more (MCOB 11.6.3R) | Usually required in full |
| Credit search | Often none or a soft search | Usually a hard search |
| Valuation | Often not needed | Usually needed |
| Legal work | Often none | Usually yes, sometimes a free legal package |
| Speed | Often quicker | Usually takes longer |
Which tends to cost less?
Neither is automatically cheaper. A product transfer often avoids a valuation fee and legal costs, since your mortgage isn’t being redeemed and replaced, which can make it cheaper upfront. A remortgage to a new lender involves more steps, and possibly a valuation or broker fee, but it opens up deals across the market, which might work out better overall depending on the rate offered. We cannot quote specific fees or rates here, so compare the total cost of any deal you’re offered, not just the headline figure. Our guide on how much it costs to remortgage explains the individual costs involved.
When does a remortgage tend to make more sense?
- Your credit history has improved since you took out your mortgage. Most negative entries drop off your credit file after 6 years, and older ones often carry less weight, so more lenders may now consider you.
- Your loan to value (LTV) has fallen. Paying down your mortgage or rising property prices can move you into a lower LTV band, which can widen the deals available. See how LTV affects a bad credit remortgage.
- You want to borrow more for a purpose your current lender won’t fund, or offers less than you need.
- Your current lender’s range is limited, or you simply haven’t compared the market for some time.
When does a product transfer tend to make more sense?
- Your credit history has worsened since you took out your mortgage, for example a new CCJ, default or missed payment, and you’d rather avoid a fuller reassessment.
- You want the simplest, quickest option and are not looking to borrow more or change other terms.
- You want to avoid a valuation, for example if you’re concerned your home’s value has fallen since you bought or last remortgaged.
- Your current lender’s deal is genuinely competitive, and switching elsewhere wouldn’t add enough benefit to justify the extra steps.
A quick way to decide
| If this describes you | Worth starting with |
|---|---|
| Nothing much has changed since you took out your mortgage | Compare both, since either could suit |
| Your credit has got worse recently | A product transfer, then compare once things have settled |
| Your credit has improved, or your LTV has fallen | A remortgage to a new lender, to see the wider choice |
| You want to borrow more | Either, but expect a fuller assessment either way |
| You’re in arrears now | Speak to your current lender first; moving lender is usually very difficult in arrears |
This is a starting point, not a rule. An adviser experienced with adverse credit can compare what your current lender offers against the wider market for your specific situation.
Can you start with one and switch to the other?
Yes. Choosing a product transfer now doesn’t lock you into another one next time. Once that deal ends, you can compare a remortgage to a new lender again, and vice versa. Many people move between the two over the years, depending on how their credit, equity and circumstances have changed each time a deal comes up for renewal.
What changes if you have adverse credit?
Adverse credit affects the two options differently. Because a like-for-like product transfer usually skips a full affordability assessment under the FCA rule above, a lender you already have may look past recent adverse credit that a new lender would scrutinise closely. A remortgage to a new lender means a fuller assessment, so recent or serious adverse credit is more likely to narrow the choice of lenders and affect the rate offered, though rates for adverse credit are often higher than high-street rates in any case.
Neither route is guaranteed. A lender can still decide what to offer someone with recent mortgage arrears, whether that’s your current lender or a new one. Our page on product transfers with bad credit explains when your existing lender might not offer a deal, and if you’re struggling with payments, free and impartial help is available from MoneyHelper, StepChange and National Debtline.
Frequently asked questions
Is a product transfer quicker than a remortgage?
Usually, yes. Because you stay with the same lender, there's often no valuation and little or no legal work, so a product transfer can often be arranged faster than a full remortgage. Exact timescales still depend on the lender and how quickly you respond to any requests.
Can I compare other lenders before agreeing to a product transfer?
Yes, and it's often worth doing, especially if your circumstances have improved or you haven't checked the market for a while. Comparing doesn't commit you to anything, and your existing lender's offer stays available unless you tell them otherwise or your deal end date passes.
Will my current lender always offer me a product transfer?
Not necessarily. A lender can decide what it offers, particularly if you're behind on payments or your mortgage is held by a firm that no longer offers new deals. If nothing is offered, comparing a remortgage to a new lender becomes more important. See product transfers with bad credit.
Does switching to a new lender always mean a lower rate?
No. Rates depend on your circumstances, the lender and market conditions at the time, not simply on whether you switch. Some people find their current lender's product transfer deal is competitive, while others find a new lender offers more for their situation. Comparing both is the only reliable way to know.