Remortgaging v Product Transfer: Key Insights 2025

When your mortgage deal is approaching its end, you have two main options: remortgage with a new lender or do a product transfer with your existing lender. Both can save you money compared to reverting to the standard variable rate (SVR), but they work differently and each has its own advantages and drawbacks. This guide compares the two options so you can make the right choice for your situation in 2025.

At Option Finance, we compare both remortgage deals and product transfer options for every client. Our goal is always to find the best outcome, regardless of whether that involves staying with your current lender or switching to a new one.

What is a product transfer?

A product transfer is when you switch to a new rate or product with your existing mortgage lender. Your mortgage stays with the same provider — you simply move from your current deal (or the SVR) onto a new fixed, tracker, or discounted rate.

The process is significantly simpler than a full remortgage:

• There is usually no affordability assessment (or a much lighter one)
• There is no property valuation
• There is no legal work or conveyancing
• There is no credit check in many cases
• The process can be completed in days rather than weeks

Because of this simplicity, product transfers have become increasingly popular. According to UK Finance data, product transfers now account for a significant proportion of all mortgage activity in the UK.

What is a remortgage?

A remortgage involves taking out a new mortgage with a different lender to replace your existing one. The new lender pays off your old mortgage, and you start making payments under the new terms.

The process is more involved than a product transfer:

• A full affordability assessment is conducted
• The new lender values your property
• A solicitor handles the legal transfer
• A credit check is performed
• The process typically takes 4-8 weeks

However, remortgaging opens up the entire mortgage market, giving you access to deals from dozens of lenders rather than just the products your current lender offers.

Comparing the key factors

Interest rates

Product transfer rates are set by your current lender and are available only to existing customers. They are often competitive but not always the best on the market. Lenders know that the convenience of a product transfer makes many customers less likely to shop around, which can mean their rates are slightly higher than the best deals available elsewhere.

Remortgage rates come from the whole market. With access to over 90 lenders through a broker like Option Finance, you can compare a much wider range of products. The most competitive rates are often found through remortgaging, particularly if your LTV has improved since you first took out your mortgage.

Our remortgage calculator lets you compare how different rates affect your monthly payments.

Verdict: Remortgaging typically offers access to better rates, but product transfer rates can sometimes be competitive, especially for borrowers with complex circumstances.

Costs

Product transfers generally have minimal costs. There is usually no arrangement fee (or a small one), no valuation fee, no legal fees, and no broker fee. This makes them very cost-effective, particularly if the rate difference with a remortgage is small.

Remortgaging can involve several fees: arrangement fees (£0-£2,000), valuation fees (often free), legal fees (often free), and broker fees. However, many of the best remortgage deals include free valuations and free legal work, which reduces the cost gap significantly.

To determine which is cheaper overall, you need to compare the total cost over the deal period — not just the monthly payment. Our mortgage calculator can help with this comparison.

Verdict: Product transfers are cheaper in terms of upfront costs, but the savings from a lower remortgage rate can more than offset the fees over a 2-5 year deal period.

Speed and convenience

Product transfers are quick and hassle-free. Many can be completed online or over the phone in a matter of days. There is minimal paperwork, no waiting for valuations or legal work, and no risk of delays.

Remortgaging takes longer — typically 4-8 weeks from application to completion. You need to provide documentation, the property needs to be valued, and solicitors need to complete the legal work. While brokers like Option Finance handle most of this for you, it still requires more of your time and attention.

Verdict: If speed and convenience are your priorities, product transfers win easily.

Eligibility

Product transfers have a significant advantage for borrowers whose circumstances have changed. Because you are staying with the same lender, many providers do not conduct a full affordability assessment or credit check. This means that even if your income has decreased, your credit has deteriorated, or your circumstances have changed in ways that might make a new application difficult, a product transfer may still be available to you.

This is particularly relevant if you have developed adverse credit since your original mortgage, or if you are now self-employed and have less than two years of accounts.

Remortgaging requires a fresh application, which means passing the new lender’s affordability assessment and credit checks. If your circumstances have changed unfavourably, you may not qualify for the rates you want — or may be declined altogether.

Verdict: Product transfers are more accessible for borrowers with changed or challenging circumstances.

Flexibility and features

Product transfers are limited to the products your current lender offers. If you want specific features — such as the ability to make unlimited overpayments, an offset facility, portability, or a longer fixed term — your current lender may not offer what you need.

Remortgaging gives you the full market to choose from, including lenders that specialise in flexible products, offset mortgages, or specific features that suit your needs. You can also use remortgaging to change fundamental aspects of your mortgage, such as adding or removing a borrower, or switching from repayment to interest-only (or vice versa).

Our overpayment calculator can show you the value of overpayment flexibility if that is a feature you are considering.

Verdict: Remortgaging offers more flexibility and a wider choice of features.

Capital raising

Product transfers generally do not allow you to borrow additional funds. If you want to release equity for home improvements, debt consolidation, or any other purpose, a product transfer will not usually accommodate this.

Remortgaging allows you to borrow more than your current balance, releasing equity from your property. This is one of the primary reasons people choose to remortgage rather than do a product transfer.

If you are looking to raise capital for a property purchase, our guide on buy-to-let mortgages explains how released equity can fund an investment property deposit.

Verdict: If you need to raise additional funds, remortgaging is the way to go.

When a product transfer is the better choice

Based on our experience at Option Finance, a product transfer tends to be the better option when:

• Your current lender’s rates are competitive — sometimes your lender offers rates that match or come close to the best on the market, and the absence of fees makes the total cost lower.
• Your circumstances have changed — if your income has dropped, your employment status has changed, or you have credit issues, a product transfer avoids the need for a new affordability assessment.
• You are in negative equity — if your property value has fallen below your mortgage balance, no new lender will accept your application, but your current lender may still offer a product transfer.
• You need speed — if your deal is expiring imminently and you have not started looking at options, a product transfer can be arranged quickly.
• The savings from remortgaging are marginal — if the rate difference is small (say, 0.1-0.2%), the fees of remortgaging may not be justified.
• Your mortgage balance is small — on a small balance, even a meaningful rate difference produces modest absolute savings that may not cover the costs of switching.

When remortgaging is the better choice

Remortgaging tends to be the better option when:

• There is a significant rate difference — if remortgage deals are materially cheaper than your lender’s product transfer rates, the savings over the deal period will outweigh any fees.
• You want to raise capital — if you need to release equity for any purpose, remortgaging is usually the only option.
• Your LTV has improved — if your property has increased in value, a new lender will recognise this and offer rates based on your current LTV, whereas your existing lender’s product transfer rates may not reflect your improved position.
• You want features your current lender does not offer — such as offset facilities, flexible overpayments, or a specific fixed-rate term.
• You want to change the fundamental terms — adding or removing a borrower, switching between repayment and interest-only, or changing the term.

For those who are first-time buyers coming to the end of their first deal, remortgaging often makes sense because your LTV has likely improved since your original purchase.

The Option Finance approach

At Option Finance, we do not have a default preference for remortgaging or product transfers. Our approach is to compare both options for every client and recommend whichever one produces the best outcome.

Here is how our process works:

1. We review your current mortgage — balance, rate, fees, and remaining deal period.
2. We check your lender’s product transfer options — we obtain the rates and terms available to you as an existing customer.
3. We search the whole remortgage market — we compare deals from over 90 lenders to find the most competitive options.
4. We compare total costs — we calculate the total cost of each option over the deal period, including all fees, to give you a clear like-for-like comparison.
5. We recommend the best option — whether that is a product transfer, a remortgage, or staying on your current deal.

Use our repayment calculator to start exploring your options, or contact us for a full comparison.

Do not let your deal expire without acting

Whether you choose a product transfer or a remortgage, the one thing you should not do is let your deal expire and drift onto the SVR. SVRs are typically 2-4% higher than the best available rates, which can add hundreds of pounds to your monthly payment.

If your deal is ending in the next 6 months, now is the time to act. The process of comparing options, applying, and completing can take several weeks, so starting early ensures a smooth transition with no gaps.

At Option Finance, we monitor our clients’ mortgage deals and proactively reach out when it is time to review. This means you never have to worry about missing the window.

FCA guidance on product transfers vs remortgages

The FCA has paid close attention to the product transfer market in recent years, recognising that many borrowers default to a product transfer without properly considering whether remortgaging would save them more money.

Under FCA rules, mortgage advisers must:

• Consider both product transfer and remortgage options when advising clients
• Demonstrate that their recommendation is in the client’s best interest
• Provide clear comparisons showing the total cost of each option
• Not default to the easier option (product transfer) without proper analysis

Some lenders offer product transfers through non-advised “execution-only” processes, meaning you choose the product yourself without receiving formal advice. While this is quick and convenient, it means no one is checking whether a remortgage with a different lender would be better for you.

At Option Finance, we always provide fully advised recommendations that compare both routes. Our advice is regulated by the FCA, giving you the protection and confidence that comes with formal mortgage advice.

If you are a first-time buyer approaching the end of your first deal, it is particularly important to get proper advice, as your circumstances may have changed significantly since your original purchase — and the best option for you now may be very different from what it was then.

Our stamp duty calculator is useful if you are also weighing up whether to remortgage and stay or sell and move to a new property, as the cost of moving includes significant stamp duty considerations.

Get your personalised comparison

The question of remortgaging versus product transfer does not have a one-size-fits-all answer. It depends on your specific circumstances — your current deal, your LTV, your income, your credit history, and your goals.

Contact Option Finance today for a free, no-obligation comparison of your product transfer and remortgage options. We will assess both routes, calculate the total cost of each, and recommend the approach that saves you the most money. It takes just a few minutes to get started, and the savings could be substantial.