By the end of this guide, you will be able to:
- Understand what a product transfer is and how it differs from a remortgage.
- Advise clients on the benefits and drawbacks of product transfers.
- Identify when a product transfer is suitable for a buy-to-let client.
- Recognise the key lender criteria and processes for product transfers.
What is a buy-to-let product transfer?
A product transfer occurs when a landlord switches to a new mortgage deal with their current lender rather than moving to a different lender through a remortgage. It is typically a straightforward process as it does not involve a full affordability assessment, new legal checks, or property valuations.
Most lenders offer product transfers to retain existing customers, and brokers play a key role in ensuring landlords get the most competitive rates available.
Why landlords consider product transfers
Product transfers offer several benefits to buy-to-let landlords:
- No legal or valuation fees – Unlike a remortgage, product transfers usually avoid legal costs and valuation fees.
- Faster and simpler process – The switch can often be completed within days, as there is no need for new affordability checks.
- Avoids stress testing – Many landlords struggle with stricter stress-testing requirements on new buy-to-let mortgages, making product transfers a practical solution.
- Loyalty incentives – Some lenders offer exclusive rates or incentives to existing customers who stay with them.
Paula Mercer, Director of Sales at Lendinvest says:
"What was once a market dominated by individual investors, the BTL market in the UK has now shifted to primarily professional landlords. Product transfers have become a critical tool for BTL investors as they navigate today's dynamic interest rate environment. For brokers, highlighting the avoidance of legal and valuation fees, alongside a faster process without the burden of full affordability reassessments positions PTs as an attractive option, especially given the complexities of the UK property market.""As an alternative lender leveraging technology, we recognise the opportunity to simplify the PT process. By streamlining internal procedures and offering transparent, readily accessible product transfer options, we empower brokers to efficiently guide their clients. This tech-driven approach not only enhances the speed and ease of execution but also ensures landlords and property investors can swiftly capitalise on favourable rates and reinforce the broker's role as a proactive and indispensable partner in their buy-to-let journey."
Potential downsides of product transfers
Despite the benefits, product transfers may not always be the best option:
- Limited lender choice – The landlord is restricted to products offered by their current lender rather than accessing the whole market.
- Potentially higher rates – Some lenders may not offer the most competitive deals compared to remortgaging with a new provider.
- Missed refinancing opportunities – A remortgage might allow for a higher loan amount, additional borrowing, or better long-term benefits.
Key considerations for brokers
When advising clients on product transfers, brokers should consider:
- Rate competitiveness – Compare the lender’s product transfer rates with other options in the market to ensure the best deal.
- Client’s long-term goals – Does the landlord need extra borrowing or a more flexible mortgage product? If so, a remortgage may be a better choice.
- Lender criteria – Some lenders only offer product transfers to clients with a good payment history or within a specific timeframe before their deal expires.
- Early repayment charges – If a landlord is exiting a fixed deal early, brokers should check for penalties that might apply.
- Portfolio landlords – Landlords with multiple properties may benefit from restructuring their finance rather than opting for a simple product transfer.
Paula says:
"For brokers navigating product transfer discussions with their clients, it’s best to take a more holistic approach. While the convenience and potential cost savings are significant selling points, a thorough assessment of the client's long-term investment strategy is just as important. Simply focusing on the rate can be short-sighted; understanding if the landlord requires additional capital, greater flexibility, or has a complex portfolio may necessitate exploring remortgage options despite the apparent ease of a product transfer."
"Furthermore, a broker's due diligence extends to understanding the specific criteria of the existing lender and any potential early repayment charges. For portfolio landlords, a strategic overview of their entire financial structure might reveal opportunities for more advantageous restructuring rather than individual product transfers. By considering these multifaceted elements, brokers can provide informed advice, solidifying their position as trusted experts rather than mere transaction facilitators."
When is a product transfer suitable?
- For landlords who want a quick and hassle-free switch – Product transfers involve minimal paperwork and no new affordability checks.
- For clients who wouldn’t pass new affordability tests – Some landlords may struggle with stricter rental stress tests on new applications.
- For landlords who want to avoid remortgage costs – No legal, valuation, or broker fees can make product transfers more cost-effective.
- For clients happy with their current lender – If the lender offers a competitive deal, staying with them may be a convenient option.
When is a product transfer not suitable?
- For landlords needing additional borrowing – If a client wants to release equity or borrow more, a remortgage may be the better choice.
- For those seeking the lowest possible rate – Some lenders may offer better rates for new customers than for product transfers.
- For landlords with changing financial needs – If a client’s circumstances have changed, they may benefit from restructuring their mortgage elsewhere.
- For clients nearing the end of their fixed term – Brokers should explore remortgage options before committing to a product transfer.
Paula says:
"Product Transfers are a simple and straightforward solution for landlords prioritising ease and speed, particularly when avoiding new affordability hurdles or remortgage-related expenses. For clients content with their existing lender and presented with a competitive offer, it represents a logical and convenient path. However, brokers must be able to identify scenarios where a product transfer falls short of the client's broader financial objectives."
"Specifically, landlords seeking to leverage their property for additional borrowing or those whose evolving financial landscape necessitates a mortgage restructure will likely find a remortgage more suitable. Also worth noting that the pursuit of the lowest rate or the approach of the current fixed term should prompt brokers to explore the wider market. By doing this, advisors ensure product transfers are deployed strategically, aligning with the individual needs and long-term goals of each BTL investor."
Conclusion
Product transfers are an essential tool in a buy-to-let broker’s advisory toolkit, offering a simple and cost-effective way for landlords to secure a new deal without the complexities of a full remortgage. However, they are not always the best option, and brokers should assess each client’s needs carefully.
At NBTLAE, we are committed to providing mortgage brokers with the latest insights and expertise to support their buy-to-let clients. Join us at the National Buy to Let Adviser Event to stay ahead of industry developments and unlock new opportunities in the market.
Paula says:
"Without question, Product Transfers hold a vital position within a BTL broker's toolkit, presenting a streamlined and more economical route for landlords to transition to new mortgage terms, circumventing the intricacies of a complete remortgage. Nevertheless, an understanding of each client's unique circumstances is crucial for brokers to ensure that a PT aligns with their client’s long-term financial objectives."
"LendInvest embraces advances and adoption in technology, and we’re committed to empowering brokers with the tools and knowledge to navigate these crucial decisions effectively. We’ve recently enhanced our Product Transfer process in our Mortgages Portal. By utilising AVMs where applicable, including other incentives and focusing on a light-touch form of underwriting, we’re able to make the Product Transfer process simple, often times seeing only days in between application and completion"
About Paula Mercer - Director of Sales ([email protected])
Paula Mercer is a dedicated and energetic sales leader with nearly two decades in the property finance industry. Since joining LendInvest, Paula has played an integral role in the specialist lender’s growth, overseeing a team covering England, Wales and Scotland, along with helping to evolve and expand the company's product propositions in Buy-to-Let, Bridging, and Residential markets.
