Introduction
We recently helped our customer in Farnborough, Hampshire, arrange a mortgage product transfer with HSBC while on maternity leave.
Our customer was approaching the end of their existing fixed-rate mortgage and wanted to secure a new deal that would provide predictable monthly repayments during a period of changing household finances.
The main challenge was finding a suitable mortgage without the additional income assessments and paperwork that could be involved in remortgaging to another lender during maternity leave.
After comparing the available options, we arranged a two-year fixed-rate product transfer with HSBC, avoiding a full remortgage application while retaining flexibility for a potential future house move.
Find out Your Options
The Scenario
Our customer was an existing homeowner with a residential mortgage secured against a leasehold property in Farnborough.
They were employed full-time but were taking maternity leave, making it important to keep their mortgage arrangements straightforward and their monthly expenditure predictable.
Their existing mortgage was with HSBC, with an outstanding balance of approximately £145,000 to £150,000 and a loan-to-value of around 65%.
As the existing fixed-rate period was approaching expiry, our customer wanted to arrange a new mortgage deal without unnecessarily complicating their finances during maternity leave.
They also anticipated potentially moving home within the following one to two years, meaning that any new mortgage product needed to provide flexibility.
The preferred arrangement was a two-year fixed-rate mortgage with no lender arrangement fee and the ability to port the mortgage to another property if required.
The Challenge
The primary challenge was arranging a suitable mortgage product during maternity leave while avoiding unnecessary underwriting, costs and restrictions on future plans.
Mortgage Affordability During Maternity Leave
Although our customer was employed on a standard salary, maternity leave introduced an additional consideration when reviewing remortgage options.
Moving to a new mortgage lender could involve a full affordability assessment, including evidence of maternity income, anticipated return-to-work arrangements and future earnings.
Different lenders assess maternity leave circumstances differently, and the additional documentation can make a remortgage more involved.
Our customer wanted to avoid this process if remaining with HSBC provided a suitable alternative.
Keeping Mortgage Costs Down
Our customer wanted to avoid paying unnecessary arrangement fees, particularly when considering a relatively short two-year fixed-rate period.
A mortgage with a slightly lower interest rate does not necessarily offer better overall value once arrangement fees and other switching costs are considered.
It was therefore important to compare the total cost of the available mortgage options rather than simply selecting the lowest advertised rate.
Flexibility to Move Home
Our customer was also considering moving to another property within the next one to two years.
Choosing a mortgage product without considering this possibility could create difficulties if they decided to move before the fixed-rate period ended.
Mortgage portability was therefore an important requirement.
Porting allows a borrower to apply to transfer their existing mortgage product to another property, although this remains subject to the lender’s criteria and approval at the time.
What We Did
We reviewed our customer’s existing HSBC mortgage, their circumstances during maternity leave and their plans for the following two years.
Rather than automatically recommending a remortgage to a new lender, we compared HSBC’s available product transfer options against alternative mortgage products across the market.
Our review focused on several important considerations:
- The overall cost of remaining with HSBC compared with remortgaging to another lender.
- Whether the available products included arrangement fees.
- The additional income verification and underwriting that might be required during maternity leave.
- The suitability of a two-year fixed-rate period.
- Whether the mortgage product could be ported if our customer decided to move home.
We reviewed the existing mortgage balance and available product options, comparing costs over the proposed two-year fixed-rate period.
We also contacted the lender and its business development manager before proceeding to discuss the case.
Our research identified that HSBC could offer a suitable product transfer without requiring the full underwriting and income reassessment associated with a new remortgage application.
This was particularly useful because our customer could secure a new mortgage deal without having to provide extensive additional income evidence during maternity leave.
The comparison also showed that remaining with HSBC offered a suitable overall solution once the product costs and practical requirements were considered.
We therefore recommended retaining the existing mortgage with HSBC and switching to a new fixed-rate product.
The Solution
We arranged a two-year fixed-rate residential mortgage product transfer with HSBC.
The arrangement included:
- Lender: HSBC.
- Mortgage type: Residential product transfer.
- Product: Two-year fixed rate.
- Repayment method: Capital repayment.
- Mortgage term: 33 years.
- Loan-to-value: Approximately 65%.
- Arrangement fee: None.
- Portability: Available, subject to HSBC’s criteria when moving home.
By completing a product transfer, our customer remained with their existing lender rather than taking out a new mortgage with another provider.
The process avoided the need for a full remortgage underwriting assessment, physical property revaluation or conveyancing associated with changing lenders.
Importantly, the selected mortgage product also retained portability, which was relevant to our customer’s potential plans to move home.
Why This Solution Worked
The HSBC product transfer addressed the three main priorities: predictable mortgage repayments during maternity leave, avoiding unnecessary upfront costs and retaining flexibility for a future move.
As our customer was not increasing their borrowing or changing lenders, HSBC could offer a straightforward rate switch without requiring a full assessment of their maternity leave income.
The absence of a lender arrangement fee also made the product suitable when comparing total costs over the two-year fixed-rate period.
Choosing a two-year rather than a longer fixed-rate period aligned with the possibility of moving home within the following couple of years.
Although the product was portable, any future transfer would still depend on HSBC’s lending criteria, affordability requirements and approval of the new property. Early repayment charges could still apply if the mortgage needed to be repaid during the fixed-rate period without an approved port.
The Result
Our customer successfully secured a new two-year fixed-rate mortgage with HSBC through a product transfer.
The arrangement provided:
- Predictable monthly mortgage repayments during maternity leave.
- No lender arrangement fee.
- No requirement for a full remortgage underwriting assessment.
- A straightforward switch with the existing lender.
- The option to apply to port the mortgage if moving home.
The customer achieved their objective of securing a new mortgage deal without the additional requirements involved in switching lenders during maternity leave.
What This Case Shows
What this case shows why reviewing a mortgage during maternity leave does not always mean moving to a new lender or completing a full affordability assessment.
For existing homeowners, a product transfer can sometimes provide a simpler alternative to remortgaging, particularly where income circumstances have temporarily changed.
It also shows the importance of comparing the overall cost and features of a mortgage, rather than focusing solely on the interest rate.
In this case, remaining with HSBC provided the appropriate balance of cost, simplicity and flexibility.
However, a product transfer will not always be the most suitable option. The right approach depends on the customer’s existing lender, mortgage requirements, available products and individual circumstances.
Looking for Mortgage Advice During Maternity Leave?
If your mortgage deal is ending while you are on maternity leave, or you are preparing to take maternity leave, Kerr & Watson can help you review your options.
We provide independent, whole-of-market mortgage advice and can compare staying with your existing lender against remortgaging elsewhere.
Whether you need a product transfer or are looking for mortgage advice in Farnborough, contact Kerr & Watson to discuss your circumstances.
