Remortgages versus product transfers

If your current mortgage is coming to an end and you are giving thought to what your next steps might be, you could well be weighing up whether a remortgage or product transfer is the right option for you. Euxton Mortgage Market always gives advice based only on what is right for our clients. We are fully FCA-compliant and believe unreservedly in treating customers fairly. For further reassurance, it may help to know that we are paid commission for product transfer or remortgages directly by the relevant lender once your mortgage transaction is completed; for us, it’s all about getting the best deal for our clients. We hope the following notes help point you in the right direction.

So, what is remortgaging?

When you remortgage, you go through the whole formal mortgage and legal application process which can take 6-10 weeks. The difference is that you don’t have to pay for solicitors or valuations.

It is often more cost-effective to remortgage if you plan to borrow extra money as some lenders will charge a higher rate for the extra borrowing if you are an existing customer.

It often works out that remortgage products are better value than product transfers in terms of rate. 

And product transfers?

If you opt for a product transfer, it means that you stay with your current lender which spells no credit scores, no valuation, no income or outgoing analysis and usually, a very simple process that can take effect from the start of the next month.

By a simple process, we mean something like just one form to sign or an online declaration; the new rate then starts from the next month. This is particularly beneficial if your deal is going to end imminently, or if you are concerned about proving your income or if you have bad credit.

Some existing lenders will offer additional incentives. Nationwide, for example, will offer £100 cashback to you if you stay with them. And Halifax will allow you to switch products even if your existing product has up to two months to go, so you can switch over two months early if it is going to be advantageous for you; i.e. if you are coming off a mortgage with a higher rate. Other lenders offer similar.

Your own personal circumstances

Of course, everyone’s financial situation differs. What works for one may not be right for another, even if they are in a similar situation. That’s where advice comes in. It is invaluable.

At Euxton Mortgage Market, we are proficient, and experienced, in advising on countless mortgage types. As a “whole of market” mortgage broker company, we have access to a particularly extensive range of products.

As we don’t charge broker fees for mortgages secured against UK property, you really have nothing to lose. Why not drop in to our offices or give us a call today?

November 2018