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Product transfers versus remortgages

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 06. June 2023

Interested in talking to brokers about product transfers and remortgages. 

  • Are product transfers becoming more popular than remortgages?
  • What are the pros and cons for each? 
  • Do you expect that the change?
  • What do you want to see from lenders on PTs and remortgages (better technology/more information sharing etc).?

 

6 responses from the Newspage community

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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
Product transfers are becoming increasingly popular among borrowers looking to switch their mortgage product with their current lender. A product transfer is essentially a new deal with the same lender, where the borrower can switch to a new rate or product without having to go through the remortgaging process. This can save time, money, and hassle for the borrower. There has been an increase due to tighter affordability.
PTs can be quicker and easier, but may not offer the best deal or terms. Remortgages may offer better rates and terms, but can be more time-consuming and involve additional fees and charges.
Borrowers may want to see better technology and information sharing. This could include online platforms that make it easier for borrowers to compare rates and products, as well as more transparent information on fees and charges.
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Justin Moy
Managing Director at EHF Mortgages
At the moment Product Transfers are definitely more popular, as borrowers are not looking to take more debt and many will fail affordability calculations based on current mortgage rates and other monthly bills. But with many of the lenders, their mortgage rates are the same, if not better, than the open market alternatives, and make it easy to swap deals when rates improve before the current product expires. That combination of ease, competitiveness and speed is so important when rates are changing quickly. I think this will continue throughout 2023, as lenders look to control new lending levels, and consumers look for any savings in rates, fees or processing.
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Aaron Strutt
Product and Communications Director at Trinity Financial
The overwhelming majority of borrowers are sticking with their lenders when their rates finish and there is no doubt PTs have transformed the remortgage market. Last year 87 per cent of remortgagers opted for a product transfer with their lender, instead of moving elsewhere, according to UK Finance. This was up from 80 per cent in 2021 and 73 per cent in 2019.
While it is great that most borrowers have remortgage option, especially at a time with SVRs are shockingly highly high, some existing customers probably are not getting the best deal or a choice of rates available to new customers. They are also not getting proper advice before they lock into a new rate. Many lenders do not provide products without early repayment charges which forces borrowers to take a fixed rate or revert to the standard variable rate.
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Imran Hussain
Director at Harmony Financial Services
When it comes to product transfers, any advisor worth their salt has to consider the client's overall position can they save money by moving or is staying put the best option for the client, The pros for PT's are they are quicker to process for the client but the downside is a through review is not carried out it could cost a client thousands if there is a better offer available on the market so always seek advice and do what's best for the client.
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Matthew Jackson
Director at Mint FS
From a broker perspective the difference between a product transfer and remortgage is negligable. We still diligently consider all options, collect relevant proofs and justify our advice. However the main difference is that the lender will generally not require any new proofs for a product transfer.

With criteria having shifted hugely in the last 3 years a number of clients will be pushed towards a product transfer simply because their circumstances / income will no longer fit the mortgage they have.

Both have advantages and disadvantages - we as a firm have used remortgages to secure long term offers in times of high market volatility for clients.

My main wish would be for all lenders to recognise the value of brokers servicing and advising on their client book and pay a more reflective procuration fee for product transfer in the future like Halifax do.
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Austyn Johnson
Founder at Mortgages For Actors
PT' - Quick, easy, but not always the best option. Imagine saving on a broker fee and then losing £100 per month because it was easy and quick.