Are mortgage product transfers a good option for customers?
As we all know the mortgage market is undergoing a period of severe uncertainty, leaving many borrowers unsure of their next steps yet, despite this, mortgage brokers are seeing more instances of people undertaking product transfers directly, believing they present a more straightforward option.
But is that the case?
Considerations such as future home moves, job changes, inheritance and expanding families are all crucial and must be considered when deciding on the correct product and structure for the mortgage. A product transfer may seem an easier option at the time, but it allows clients to sidestep advice easily, and can lead to decisions that come back to haunt them in future in the form of early repayment charges or inflexible mortgage loans.
Financial advice goes way beyond getting a rate. A mortgage broker can look at future planning, investigate underlying household and lifestyle pressures and identify opportunities based on in depth conversations with clients during the re-mortgage process.
A broker will understand the wider situation and take time to identify alternative options clients may not even have thought about. This results in better customer outcomes, so clients are advised to take up the overall advice opportunity even if this still results in a product transfer with their existing lender in the end.
Borrowers panicking about rising rates and choosing to product transfer with their current lender without consulting a broker, are also potentially losing out on lower interest rates from alternative lenders and paying more than they need to.
Those who may be struggling with their current repayments may also be missing out on alternative options open to them such as extending the term of their mortgage to keep repayments down.
And other clients may later wish they had more flexible options available such as being able to make overpayments or being able to port their mortgage loan to another property.
Overall a product transfer may still be the best option for a client BUT it will then be a well-informed decision taken after reviewing all other available information.
Please book an appointment with us now if you are within six months of your fixed rate deal ending.
*Your home may be repossessed if you do not keep up repayments on your mortgage.*
Content accurate at point of publication and is subject to change – 17 August 2023