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The £82bn broker opportunity that’s too big to miss – Calder

by: Craig Calder, director of intermediaries, Barclays Mortgages
  • 12/09/2018
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The £82bn broker opportunity that’s too big to miss – Calder
There are many kinds of opportunities, some that need uncovering, and some that come along and almost smack you in the face.

 

On the back of the recent interest rate hike it’s little wonder that opportunity has risen to the fore in the mortgage market, but did you know that there are a massive £82bn reasons why intermediaries should be focusing their attention on the remortgage sector?

This figure stems from CACI data – focusing on the period September to December 2018 – which highlights that £82bn worth of market maturities are taking place over these four months.

An opportunity for the intermediary market that is simply too big to miss.

It also comes at a time when homeowners are craving some reductions in household spending.

According to Office for National Statistics data – households spent £900 more than they earned income-wise in 2017, amounting to more than £25bn of debt or savings-funded spending.

This marked the first occasion when UK families spent more than their income since 1988.

Despite the growing need to cut costs where possible, CACI data also suggests there are an estimated £100bn+ of residential and buy-to-let mortgage balances, which are still resting on term-based products (SVR and Tracker) with a pay rate above 3.75%.

This equates to circa 1.4m customers who could potentially save money by remortgaging.

Why pay more?

Barclays internal data highlights that these homeowners will have already seen their annual mortgage payments increase (on average) by around £200 when the BOE increased base rate last November; and can now expect a similar increase following August’s 0.25% increase.

In 2018, our average 60% loan to value (LTV) two-year fixed rate has been 1.60% – that’s less than half the SVR market average of 4.7% and represents a saving of roughly £120 per month.

Not that we are the only lender offering such competitive rates.

Lenders help brokers to remortgage clients

Many lenders – Barclays included – incorporate the following facilities to help intermediaries better service their clients remortgaging needs.

  • Remortgage offers can be valid for up to 6 months from the date of application
  • Up to 90% LTVs are available for like-for-like remortgage on shared ownership properties
  • Applications are considered where terms extend into retirement.

These are only rough guidelines – intermediaries will have to check individual lender’s criteria and policies – but they do help to emphasise the support on offer for a variety of clients.

What can you do?

  • Revisit your client database and consider which of your previous clients have not acted at their last maturity date
  • Pro-actively contact them for a mortgage review where appropriate
  • Use SVR factsheets to demonstrate how much they could save by remortgaging

Taking these three simple steps could pave the way to tapping into this £82bn remortgage vault and help ensure more clients get the right mortgage deal to best suit their present and future needs.

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