When your buy-to-let mortgage deal is coming to an end, you generally have two options: a product transfer or a remortgage. Deciding which is best for you depends on your specific situation, so let’s take a quick look at the pros and cons of each.
Product Transfer
A product transfer involves staying with your current lender but switching to a new mortgage deal once your existing one expires.
Pros:
– Quick and Simple: No need for a full mortgage application process. Since you’re staying with your current lender, the process is faster and less paperwork is required.
– No Additional Costs: Typically, there are no legal fees, valuation fees, or other costs associated with a product transfer.
– No New Affordability Checks: Your lender may not require new affordability assessments, making it easier to qualify.
Cons:
– Limited Options: You’re only able to choose from your current lender’s range of products, which may not be as competitive as deals available elsewhere.
– No Opportunity to Release Equity: If you’re looking to release equity from your property, most product transfers won’t allow this.
Remortgage
A remortgage means switching to a new lender with a different mortgage product, which can potentially offer more favourable terms.
Pros:
– Access to Better Deals: A remortgage gives you access to a wider market, potentially allowing you to find lower rates or more flexible terms.
– Option to Release Equity: If your property has increased in value, you can release equity, giving you extra cash for further investments or other needs.
– Potential for Improved Terms: You may find a lender offering better terms that align more closely with your investment strategy.
Cons:
– Costs Involved: Remortgaging will involve legal fees, valuation fees, and redemption charges from your existing lender, which add to the overall cost.
– Longer Process: Unlike a product transfer, remortgaging requires a full mortgage application, which takes more time and involves an affordability assessment.
– Risk of Rejection: If your financial circumstances have changed or you don’t meet new lenders’ criteria, there’s a risk of not securing the remortgage deal you want.
Which Option is Best for You?
If you want a fast and hassle-free process without additional costs, a product transfer might be the right choice. However, if you’re seeking the best possible rate or want to release equity from your buy-to-let property, a remortgage could offer better value, despite the longer process and additional costs.
In either case, it’s always advisable to speak with a mortgage broker who can help you evaluate your options and find you the best solution.