Reply To: Move link hover overlay above image

[Shikkediel]

You could use a pseudo element instead of changing the background:

.product-overlay {
   display: block;
   position: relative;
   color: black;
   text-decoration: none;

   &:hover:after {
      content: "";
      width: 100%;
      height: 100%;
      position: absolute;
      top: 0;
      background-color: rgba(86, 86, 86, 0.03);
      transition: all .2s ease;
      z-index: 1;
   }
}