Last reviewed: June 2026
TL;DR- A product transfer (PT) switches to a new deal with the existing lender - faster, cheaper, less documentation, but the rate may not be the most competitive.
- A full remortgage to a new lender can access the best market rates but involves legal fees, a valuation and takes longer.
- Product transfers often allow early switching (before the deal end date) without an ERC - useful for locking in rates in advance.
- For most straightforward situations where the existing lender's PT rate is within 0.1-0.2% of market best, a PT is often the pragmatic choice when transaction costs are included.
What Is a Product Transfer?
A product transfer (sometimes called a rate switch) means selecting a new interest rate product from the existing lender, without any change to the outstanding loan amount, the property, or the security arrangements. The existing mortgage continues on its terms (except the interest rate), with no new legal work required and typically no new valuation. Most lenders allow borrowers to arrange a product transfer directly online or by phone, often weeks or months before the current deal ends, with the new rate activating on the deal end date.
Speed and Convenience
Product transfers are significantly faster and more convenient than full remortgages. A product transfer can often be arranged in minutes online; the new rate takes effect automatically at the right date. A full remortgage involves instructing a solicitor, providing documentation, a valuation, legal searches and a completion process - typically 4-8 weeks. For borrowers who want certainty quickly and without administrative burden, the product transfer is the simpler path.
Rate Comparison: The Critical Factor
The rates available on a product transfer may not match the best rates available in the wider market. Lenders do not always offer their most competitive rates to existing customers switching products. The rate differential between the best product transfer available and the best whole-of-market remortgage rate determines whether a full remortgage is financially worthwhile.
On a £200,000 outstanding mortgage, a difference of 0.25% in rate equates to approximately £500 per year in interest. If the remortgage costs £1,500 in fees and takes effect on the same date as the product transfer would, the break-even period for the fee cost is three years. If the fix term is less than three years or the borrower expects to move or change the mortgage within that time, the fee cost may not be recovered. If the rate differential is larger, the break-even is shorter.
Situations Where a Full Remortgage Makes Sense
A full remortgage is preferable when: the rate differential is significant (over 0.3-0.5%) and the mortgage has sufficient remaining term to recover the costs; the borrower wants to raise additional capital (equity release); the borrower wants to change the mortgage structure (extend the term, change from interest only to repayment); the existing lender's product range is limited; or the borrower's circumstances have changed in a way that benefits from a new lender's approach (income increased, LTV improved significantly, relationship with existing lender has issues).
Frequently Asked Questions
Can I do a product transfer early, before my current deal ends?
Most lenders allow borrowers to reserve a new product transfer rate 3-6 months before the deal end date, with the new rate activating on the deal end date and no early repayment charge triggered. This allows borrowers to lock in current rates without paying the existing deal's ERC. The specific advance booking period varies by lender and should be checked.
Does a product transfer require an affordability assessment?
Most product transfers at the same loan amount do not require a full affordability reassessment - the lender relies on the existing payment history rather than a new income assessment. However, product transfers that involve an increase in the loan amount (capital raising) do require a new affordability assessment. The specific requirements vary by lender.
Can I change from interest only to repayment on a product transfer?
Some lenders allow the repayment structure to be changed (interest only to repayment or vice versa) at the same time as a product transfer. A change from interest only to repayment typically requires a new affordability assessment as the monthly payment increases. Not all lenders allow structural changes on a product transfer - a full remortgage may be required for structural changes with some lenders.
What if my property value has changed significantly - does this affect the product transfer?
Product transfers typically do not involve a new valuation, so the LTV used is either the original or the most recently assessed value rather than the current market value. If the property value has increased significantly and the borrower would benefit from a lower LTV tier on the rate, a full remortgage with a new valuation is needed to access the improved LTV rate. A product transfer keeps the LTV at the existing level and any associated rate benefits are not automatically applied.
