Re-mortgage

At the end of an initial fixed, tracker or discount rate, rather than remaining with the same lender, a re-mortgage is moving your existing mortgage from one lender to another. The new mortgage will repay the balance with the existing lender. You can also re-mortgage if the mortgage is on a lender's Standard Variable Rate.

Product Transfer (also known as a 'Rate Switch')

At the end of an initial fixed, tracker or discounted rate rather than moving to a new lender (as a re-mortgage), you can remain with the same lender and simply select a new interest rate. Typically, the borrowing amount and term remain the same, so makes for a simple alternative to re-mortgaging. It is important to note that this isn't necessarily the best value or lowest interest rate solution, but could be additional reasons for remaining with the same lender. This could be due to not meeting a new lender's affordability critieria or having poor credit since the initial mortgage was applied for. Or simply, not enough time before the initial period ends before changing to the Standard Variable Rate. If you wanted to borrow more, change the term or repayment type, this wouldn't be treated or assessed in the same way as a Re-mortgage application. 

What are the benefits of a Product Transfer?

• There is no legal process because you already own the property and remain with the same lender
• The application or request for a Product Transfer is such more simplified than a standard re-mortgage application
• No new credit search/score will be completed nor will the application be underwritten
• The new interest rate can be secured 3 months in advance of the fixed rate ending, without incurring any Early Repayment Charge (subject to individual lender criteria)
• If the new interest rate is lower than the existing one, you could start the new rate sooner (within 3 months of the end date), without incurring any penalties
• The new interest rate will automatically start once the existing fixed rate ends.

What are the disadvantages of a Product Transfer?

• ​It may not the best-value solution nor the lowest interest rate.

I always compare product transfer rates to re-mortgage rates with other lenders in the market to ensure the best value or best suited solution is recommended.

Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or other debts secured on it. 

Some mortgages, such as commerical Buy-to-Lets, are not regulated by the Financial Conduct Authority.

The Financial Ombudsman Service (FOS) is an agency for arbitrating unresolved complaints between regulated firms and their clients. Full details of the FOS can be found on the website,                       www.financial-ombudsman.org.uk.

Joanna Stickings trading as Certitude Wealth (FCA Number 618000) is an appointed representative of Julian Harris Mortgages Ltd (FCA Number 304155), which is authorised and regulated by the Financial Conduct Authority.

Joanna Stickings - Principal and Mortgage and Protection Adviser