A product transfer is a new deal with the lender you already have, and it is often the most straightforward option when your credit has worsened since you took out your mortgage. Where you are not borrowing more, FCA rules allow your lender to switch you without a full affordability assessment, so new defaults or missed payments on other accounts may matter less than they would to a new lender. It is not guaranteed. A lender can still decide what it offers, particularly if you are behind on the mortgage itself.
This page explains what the FCA rule does and does not cover, when a product transfer may not be offered, and how it compares with moving lender. Our guide to remortgaging with the same lender covers credit searches in detail, so we do not repeat that here.
On this page
In short
- Where you are not borrowing more, a lender can switch you without a full affordability assessment (FCA rule MCOB 11.6.3R).
- The rule allows a switch, but it does not oblige your lender to offer you one.
- Arrears on the mortgage itself are the main thing that can limit what your lender offers.
- Doing nothing usually means moving to the standard variable rate, which is usually higher.
What does the FCA rule on product transfers actually say?
The rule is in the FCA’s mortgage conduct rules, MCOB 11.6.3R. In broad terms, where an existing customer moves to a new deal with the same lender, is not borrowing more (other than to cover a product fee) and is not changing the mortgage in a way that is material to affordability, the lender does not have to carry out a full affordability assessment.
This exists so that people who have kept paying their mortgage are not trapped on a higher rate because their circumstances or credit file have changed. For someone whose credit has taken a knock since they borrowed, it is often the most important rule to know about.
What the rule does not do
- It does not oblige your lender to offer you a new deal, or any particular deal.
- It does not stop a lender checking your credit file if it chooses to.
- It does not cover extra borrowing, which usually means a fuller assessment.
- It may not apply if you change the term, switch from interest-only to repayment, or add or remove a borrower, depending on the change and the lender.
When might your lender not offer a product transfer?
Most lenders offer new deals to existing customers, but there are situations where the choice may be limited or where no deal is offered:
- You are in arrears now. A lender can decide what it offers someone who is behind. Some may want the account brought up to date first, and some may offer a deal as part of an arrangement to help.
- Your mortgage is with a firm that no longer lends. Some mortgages are held by firms that do not offer new deals at all. Our guide to mortgage prisoners explains this situation.
- You want to borrow more at the same time. That is a further advance rather than a straight switch, and affordability is usually assessed.
- You want other changes, such as a longer term, which may lead the lender to reassess you.
Contact your lender as early as you can. Lenders must treat struggling borrowers fairly and consider options such as a payment arrangement. Free, confidential help is available from StepChange and National Debtline. Our page on remortgaging with mortgage arrears explains more.
Product transfer or remortgage: which fits your situation?
A product transfer is not automatically the right choice, and neither is moving. The answer usually depends on how your credit, equity and plans have changed since you took out the mortgage.
| Your situation | Why a product transfer may suit | Why comparing other lenders may be worth it |
|---|---|---|
| Recent defaults or missed payments on other credit | Your lender may not reassess you in the same way as a new lender | Fewer new lenders may consider recent adverse credit |
| Old entries have dropped off your file | It is usually quick and simple | More lenders may now consider you, so there may be other deals |
| Your LTV has fallen | Your lender may price its deals by LTV too | A lower LTV band can widen the choice elsewhere |
| You want to borrow more | A further advance may be possible, with a fuller assessment | Other lenders may consider the extra borrowing |
| You are in arrears now | Your lender decides what it offers, so talk to it early | Moving lender is usually very difficult while in arrears |
General patterns only, not lender rules. Each lender sets its own criteria, products and processes.
Our guide on remortgage or product transfer compares the two in more depth. If you want to raise money rather than just change rate, see releasing equity with bad credit.
What happens if your deal ends and nothing is arranged?
When a fixed or tracker deal ends, most mortgages move to the lender’s standard variable rate (SVR), which is usually higher. Your monthly payment can rise noticeably, and it can stay there for as long as you do nothing.
The SVR does often have one advantage: many lenders do not apply early repayment charges to it, which can leave you free to move when your options improve. If you are already on the SVR, see stuck on the standard variable rate, and our guide to what an SVR is.
Questions to ask your lender before you accept a new deal
Many lenders let you arrange a product transfer a few months before your deal ends, often 3 to 6 months ahead. Some lenders offer product transfers directly without advice, and some let a broker arrange them. Before you agree, it helps to ask:
- Which deals can you offer me, and from what date?
- Will you search my credit file, and would it be a soft or hard search?
- Is there a product fee, and can I pay it up front rather than add it to the loan?
- What early repayment charges apply if I need to move or overpay during the new deal?
- Will I receive a new offer or confirmation to check before it starts?
Compare the total cost over the deal, including any fee, rather than the monthly payment alone.
Product transfers during an IVA, DMP or trust deed
Being in a debt arrangement does not automatically rule out a new deal with your current lender, because a like-for-like switch is not new borrowing. During an IVA, check your own IVA terms or ask your IVA supervisor before agreeing to anything, as many IVAs contain terms about your home. Our page on mortgage renewal during an IVA goes into this.
If you are on a debt management plan, keeping your mortgage on a reasonable rate can help protect the budget the plan relies on. In Scotland, see our page on protected trust deeds. If your budget is under strain, MoneyHelper can point you to free advice.
What may affect the product transfer your lender offers
Your current lender already knows your mortgage history. These are the points most likely to shape what it offers.
| Factor | Why it matters |
|---|---|
| Mortgage payment record | Your lender can see every payment on your account. A clean record usually helps most. |
| Current arrears | If you are behind now, the lender may limit its offer or want arrears dealt with first. |
| Whether you are borrowing more | A straight switch falls under the FCA rule. Extra borrowing usually means an affordability assessment. |
| Changes to the term or borrowers | Extending the term or adding or removing someone may lead to a fuller assessment, depending on the lender. |
| Loan to value | Lenders often price deals in LTV bands and may use an updated estimate of your home’s value. |
| Your lender’s product range | Some lenders offer a wide range to existing customers. Firms that no longer lend may offer none. |
| Repayment type | Interest-only or part-and-part mortgages may raise questions about how the capital will be repaid. |
| Timing | Arranging a deal before your current one ends can help you avoid time on the SVR. |
| Debt arrangements | An IVA or trust deed may have terms that affect what you can agree, so check with your supervisor or trustee. |
These are general points, not lender rules. Each lender sets and changes its own criteria.
Information an adviser may ask for
You don’t need all of this to make an enquiry. It helps to know where to find it, because an adviser is likely to ask about most of it.
- Your current lender, mortgage balance and repayment type
- Your deal end date and any early repayment charges
- Any product transfer deals your lender has already offered
- Your mortgage payment history, including any missed payments
- Details of any arrears or payment arrangements
- Your credit reports, if you want to compare moving lender
- Whether you want to borrow more, change the term or change who is on the mortgage
- Details of any IVA, DMP or trust deed and your supervisor’s contact details
Specific situations
More detail for particular circumstances.
Already on the standard variable rate with bad credit
Why homeowners end up on their lender’s standard variable rate with bad credit, whether a product transfer or remortgage is realistic once you are already there, and what to check first.
Frequently asked questions
Is a product transfer always cheaper than remortgaging to a new lender?
Not always. A product transfer often has lower upfront costs, as there is usually no valuation or legal work, but another lender may offer a lower rate, especially if your credit has improved or your LTV has fallen. With recent adverse credit, though, your current lender may be one of the few options. Compare the total cost over the deal.
How early can I arrange a product transfer?
Many lenders allow you to choose a new deal a few months before your current one ends, often 3 to 6 months ahead, depending on the lender. Arranging it early can help you avoid time on the standard variable rate. Some lenders let you switch earlier, but early repayment charges may apply.
Can I add or remove someone from the mortgage with a product transfer?
Changing who is on the mortgage is usually treated separately from a straight switch, and the lender will normally want to check that the remaining or new borrowers can afford it. See removing a partner from the mortgage and our guide to adding someone to a mortgage.
Does a product transfer show on my credit file?
Usually your mortgage continues as the same account with your lender, so a product transfer does not normally appear as a new loan. If the lender runs a hard search, that will show and other lenders can see it. Ask your lender which type of search, if any, it will use.
Will my lender offer me a new deal if I am on a payment arrangement?
It depends on your lender. Some may offer a new deal as part of helping you, while others may want the arrangement completed first. Tell your lender about your situation honestly and ask what it can do. Our page on being on a payment arrangement explains more.
Can I get a product transfer if my mortgage has been sold to another firm?
Your mortgage terms stay the same when it is sold, but the new owner may not offer new deals. If it does not, you may stay on its variable rate unless you can move to another lender. The FCA has information about mortgage prisoners, and an adviser can check whether any other lender may consider you.