Recent hints include comments from Mark Carney on a projected increase ‘at the turn of the year’ and this month also saw the first non-unanimous vote among MPC members since last year.
Despite interest rates being at a record low, figures have consistently shown less activity in the remortgaging market when compared to last year. It was great to see an upswing in this trend in June, where the BBA’s figures revealed a 20% rise in remortgaging activity compared to the same period last year, and more recently the CML posting a 34% increase in activity compared to the same period in 2014. However, there are still many borrowers neglecting to act to secure record-low rates.
The BBA and CML’s recent figures show that some people are beginning to realise that the window to secure low rates is narrowing rapidly. Borrowers may not be aware that lenders will price in a rise before it happens, making time even more limited than some may think. It’s vital that brokers are there to ensure that their clients are aware of the imminent prospect of rate rises, and to offer guidance so that they can make the most of current rates and get a deal that suits them best.
Some lenders are preparing for this by introducing online execution-only product transfer systems, making it easier for customers to opt for a fixed rate with their existing lender. However, the easy option isn’t necessarily the right one. People could potentially save significantly more by getting to know their choices in the market as a whole, which is where brokers can help by guiding clients through the rates available to them.
It’s therefore paramount that brokers are proactively raising the subject with their clients so that they can make the most of low rates now. Once rates start going up, borrowers will start to take the initiative and get in touch with whoever they view as their adviser. This could either be their broker or their lender, depending on who’s been looking after them best over the last few years.
It’s a large part of a broker’s responsibility to ensure that they are their clients’ first port of call when it comes to advice. This can also lead to numerous other opportunities, where an in-depth review could uncover other needs in addition to the initial reason for getting in touch, such as insurance or family referrals. Raising topics such as this, which could potentially save customers large sums of money, can make the difference, and subsequently benefit both brokers and their customers in the long run.