I hope this is the right place to ask this. My son bought his first flat in March 2023 on a two year fixed rate at 4.89% with Halifax, and that product is due to expire in March 2026. He has been keeping an eye on rates since the Bank of England cut to 3.75% earlier this month, and his broker has suggested he could either do a product transfer with Halifax, staying with them on a new deal, or remortgage to another lender entirely.
The broker seems to be pushing the remortgage route because there is a slightly better rate available elsewhere, but my son is worried about the fees involved. His current balance is around £168,000 on a flat valued at roughly £230,000 when he bought it, though we think it may have come down a little since then. He does not have much in the way of savings to cover upfront costs.
What I am trying to understand is whether a product transfer is genuinely the simpler and cheaper option, or whether the savings from a lower rate elsewhere would outweigh the legal fees and valuation costs of a full remortgage. He has no early repayment charge as such because the fixed period ends in March, but I believe he needs to apply before then to have something in place.
A few specific questions if anyone has been through this recently. Is there a typical window before the end of a fixed term when you can lock in a new rate without penalty? Do product transfers usually avoid the need for a new valuation? And is there any downside to doing a product transfer if the rate difference is small, say 0.2% or so?
Thank you in advance for any guidance. I want to make sure he is not rushed into something by the broker without understanding the options properly.
Most lenders allow a product transfer to be arranged up to four months before the existing deal expires, so your son should already be within the window for Halifax. The key advantage of a product transfer is no legal fees and no valuation, so the cost is essentially zero. A full remortgage to another lender would involve conveyancing and potentially a product fee, but could be worth it if the rate difference is material. At today’s pricing the gap between Halifax retention rates and the wider market is fairly narrow for a two year fix. He should check whether there is any early repayment charge running past the maturity date, as some Halifax products have a small tail. Worth getting both quotes side by side before deciding.
Thank you, @CGT_Watcher, that is very helpful and I will pass it on to him. He has been putting it off over Christmas but given he is already inside the four month window I think he needs to get on with it.
One thing I wanted to ask is whether it would be worth him also speaking to a broker at this stage, or whether a product transfer with Halifax is likely to be competitive enough. With four rate cuts now in 2025 and Bank Rate down to 3.75%, I keep wondering whether the fixed rates on offer have come down enough that shopping around would make a meaningful difference. His outstanding balance is about £168,000 on a flat valued at roughly £220,000 when he bought it, so the LTV should be quite reasonable now.
I appreciate this may be a question for a broker rather than a forum, but if anyone has recent experience of comparing a Halifax product transfer against what is available on the open market, I would be grateful to hear how it compared. Many thanks.