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Take the worry out of remortgaging: How brokers can restore confidence – Stinton

by: Jonathan Stinton, head of intermediary relationships at Coventry for intermediaries
  • 21/06/2024
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Take the worry out of remortgaging: How brokers can restore confidence – Stinton
As 727,000 mortgages are set to mature in the second half of 2024, brokers are gearing up for a busy period of guiding clients through the complexities of remortgaging and product transfers.

Recent research has revealed that six in 10 borrowers are concerned about their current mortgage deal ending and their ability to secure an affordable rate moving forward.

This concern is not unfounded, given the shifting landscape of mortgage rates and the broader economic context. Brokers are in the best position to guide clients through the options that are best for them and talk them through the changes in the current mortgage rate environment.

 

Why are borrowers worried about remortgaging?

Mortgage borrowers whose deals are ending this year will be facing significantly higher rates compared to when they last secured their mortgage. In May 2024, the average rate for five-year fixed mortgages stood at 5.91%, a substantial increase from the 2.85% seen in 2019. Similarly, homeowners with two-year fixed mortgages are also encountering higher rates, with average rates also rising to 5.91% by the start of May.

The financial pressures on borrowers are compounded by the ongoing cost-of-living crisis, which has strained household budgets and heightened anxiety about meeting mortgage payments and finding an affordable product in the market. A staggering four in five (80%) Brits feel that the mortgage market has negatively impacted their mental health, underscoring the emotional toll of these financial uncertainties.

In this challenging environment, brokers play a critical role in providing reassurance and practical advice. By discussing the various financial options available, brokers can help homeowners navigate the transition to a new mortgage deal with greater confidence.

 

What’s the best option for your client?

The key to helping clients find the best mortgage option lies in understanding their unique financial circumstances and providing tailored advice. For many borrowers worried about their ability to remortgage, product transfers might offer a more compelling solution.

Product transfers involve continuing the existing loan with the same lender, eliminating the need for a new affordability check. This process is not only quicker but also simpler, as it avoids the extensive paperwork and scrutiny involved in a traditional remortgage. This will also alleviate the potential stress for borrowers looking for a new mortgage with a different lender, as a product transfer will be guaranteed.

Product transfers are not the only option, and in some cases, remortgaging might be the better route. Brokers create real value for their clients by taking a comprehensive approach that considers the borrower’s entire financial picture. This includes evaluating factors such as equity, loan-to-value (LTV) ratios, credit histories, future plans for the property, future costs, and their eligibility for products.

If a client requires additional funds for home improvements or other expenses, a remortgage could provide the necessary capital. 

Alternatively, they can apply for a further advance with Coventry for Intermediaries, and benefit from our new policy that includes a procuration fee for this service. By comparing and analysing different products, brokers can identify options that best align with the client’s financial goals and circumstances.

Clients may worry about the task of finding a new mortgage deal in today’s market, but the role of brokers in the process can help to put their minds at rest. Brokers are uniquely positioned to offer bespoke advice that not only addresses immediate financial concerns but also supports clients’ long-term financial wellbeing.

By guiding clients through their mortgage options and helping them secure a product that fits their specific needs, brokers can build lasting relationships and establish themselves as the go-to source for financial advice. This personalised approach not only benefits the clients, but also enhances the broker’s reputation and fosters loyalty.

In an unpredictable mortgage market, brokers who stay informed about the latest trends and products can provide invaluable assistance to their clients, ensuring they find the most suitable and affordable mortgage options available.

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