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Saturday 4 January 2025
Saturday 4 January 2025
Saturday 4 January 2025
Saturday 4 January 2025
A product switch, also known as a product transfer, allows you to move to a new mortgage deal with your existing lender without altering the terms of your loan or going through a full remortgage process. This option is particularly attractive when your current fixed or tracker rate deal is ending or if you are on your lender's Standard Variable Rate (SVR) and looking for more affordable repayments.
Pros of Product Switching
1. Simplicity and Speed
Product switching with your current lender is typically faster and involves less paperwork compared to remortgaging with a new lender. There’s usually no need for a property valuation or legal work, which streamlines the process significantly.
2. No Credit Checks or Income Verification
Most lenders do not require a credit check or income verification for a product transfer, provided your mortgage payments are up to date. This can be particularly beneficial if your financial circumstances have changed.
3. Lower Fees
Product transfers generally come with fewer fees than remortgaging. While an arrangement fee may apply, you can typically avoid legal and valuation fees, making it a cost-effective option.
Cons of Product Transfers
1. Limited Product Options
You are restricted to the products offered by your current lender, which may not always be the most competitive in the market. Exploring options from other lenders could potentially secure a better deal.
2. Inflexibility in Loan Terms
A product switch usually doesn’t allow changes to your mortgage term, repayment type, or additional borrowing. If you require these adjustments, a remortgage might be a more suitable option.
3. Potential Overpayment Restrictions
If you plan to make a large overpayment, be aware that many lenders cap overpayments during fixed-rate periods, typically between 10% to 20% of the current balance. Exceeding this limit could result in early repayment charges (ERCs).
With a remortgage, you can often borrow less and pay the shortfall to the solicitors on completion, providing greater flexibility.
Considerations When Making Large Overpayments
If your fixed rate is ending and you wish to make a substantial overpayment beyond your lender’s allowance, timing is crucial to avoid early repayment charges.
One strategy is to schedule the product transfer to take effect after the overpayment, which might mean spending a short period on the SVR. This approach allows you to reduce your mortgage balance without penalties.
It’s essential to discuss this strategy with one of our expert advisors at Barrett Mortgages to ensure it aligns with your lender’s policies.
Why Choose Barrett Mortgages for a Product Transfer?
1. Market Comparison
While your lender may offer convenient product switches, they may not be the most competitive in the wider market. At Barrett Mortgages, we can compare your lender’s deals against others to ensure you secure the best rate available.
In most cases, we can facilitate the product transfer on your behalf while still reviewing all available options. If the best course of action is to proceed with the transfer, we can handle the process for you, ensuring a smooth transition.
2. Ongoing Rate Monitoring
Once a product switch is arranged, lenders typically won’t notify you if rates drop before the switch takes effect.
At Barrett Mortgages, our proactive approach ensures continuous rate monitoring, allowing us to adjust your selection if more favourable options become available before completion.
3. Tailored Advice
Our team of expert brokers takes the time to assess your unique financial situation and future plans, providing personalised recommendations on whether a product transfer or remortgage is the better choice for you.
Final Thoughts
A product transfer offers a convenient and often cost-effective way to secure a new mortgage deal with your existing lender. However, it’s essential to weigh the limitations and compare all available options.
Speaking with one of our experienced mortgage advisors at Barrett Mortgages can provide valuable insights and potentially save you money by ensuring you choose the most suitable mortgage product for your needs.
A product switch, also known as a product transfer, allows you to move to a new mortgage deal with your existing lender without altering the terms of your loan or going through a full remortgage process. This option is particularly attractive when your current fixed or tracker rate deal is ending or if you are on your lender's Standard Variable Rate (SVR) and looking for more affordable repayments.
Pros of Product Switching
1. Simplicity and Speed
Product switching with your current lender is typically faster and involves less paperwork compared to remortgaging with a new lender. There’s usually no need for a property valuation or legal work, which streamlines the process significantly.
2. No Credit Checks or Income Verification
Most lenders do not require a credit check or income verification for a product transfer, provided your mortgage payments are up to date. This can be particularly beneficial if your financial circumstances have changed.
3. Lower Fees
Product transfers generally come with fewer fees than remortgaging. While an arrangement fee may apply, you can typically avoid legal and valuation fees, making it a cost-effective option.
Cons of Product Transfers
1. Limited Product Options
You are restricted to the products offered by your current lender, which may not always be the most competitive in the market. Exploring options from other lenders could potentially secure a better deal.
2. Inflexibility in Loan Terms
A product switch usually doesn’t allow changes to your mortgage term, repayment type, or additional borrowing. If you require these adjustments, a remortgage might be a more suitable option.
3. Potential Overpayment Restrictions
If you plan to make a large overpayment, be aware that many lenders cap overpayments during fixed-rate periods, typically between 10% to 20% of the current balance. Exceeding this limit could result in early repayment charges (ERCs).
With a remortgage, you can often borrow less and pay the shortfall to the solicitors on completion, providing greater flexibility.
Considerations When Making Large Overpayments
If your fixed rate is ending and you wish to make a substantial overpayment beyond your lender’s allowance, timing is crucial to avoid early repayment charges.
One strategy is to schedule the product transfer to take effect after the overpayment, which might mean spending a short period on the SVR. This approach allows you to reduce your mortgage balance without penalties.
It’s essential to discuss this strategy with one of our expert advisors at Barrett Mortgages to ensure it aligns with your lender’s policies.
Why Choose Barrett Mortgages for a Product Transfer?
1. Market Comparison
While your lender may offer convenient product switches, they may not be the most competitive in the wider market. At Barrett Mortgages, we can compare your lender’s deals against others to ensure you secure the best rate available.
In most cases, we can facilitate the product transfer on your behalf while still reviewing all available options. If the best course of action is to proceed with the transfer, we can handle the process for you, ensuring a smooth transition.
2. Ongoing Rate Monitoring
Once a product switch is arranged, lenders typically won’t notify you if rates drop before the switch takes effect.
At Barrett Mortgages, our proactive approach ensures continuous rate monitoring, allowing us to adjust your selection if more favourable options become available before completion.
3. Tailored Advice
Our team of expert brokers takes the time to assess your unique financial situation and future plans, providing personalised recommendations on whether a product transfer or remortgage is the better choice for you.
Final Thoughts
A product transfer offers a convenient and often cost-effective way to secure a new mortgage deal with your existing lender. However, it’s essential to weigh the limitations and compare all available options.
Speaking with one of our experienced mortgage advisors at Barrett Mortgages can provide valuable insights and potentially save you money by ensuring you choose the most suitable mortgage product for your needs.
