Last week Mortgage Solutions polled brokers on whether now is the best ever time to remortgage. A massive 81% said yes it is, though a sizeable 15% argued that historically there have been better products available for the right borrowers.
According to data from UK Finance, around 36,800 borrowers remortgaged in July, up by 10% from last year, while that business was worth £6.7bn, up 12% on the previous July.
Remortgage business is expected to grow even further in the coming weeks and months, with consumer data firm CACI claiming that more than £35 billion worth of mortgages are due to mature in September and October, 70% of which came from intermediary business.
Stuart Gregory, managing director of Lentune Mortgage Consultancy, said that the key element for the remortgage market isn’t the availability of credit or products, as competition is fierce. Instead, the problem remains borrower apathy.
He continued: “Many borrowers still haven’t reviewed their mortgage in many years, and probably aren’t aware of the options available to them. Lenders could help stimulate the market by asking in marketing ‘when did you last review your mortgage’. Some may get a pleasant surprise.”
A previous Mortgage Solutions poll of brokers found that while intermediaries agree a clear strategy for contacting clients about remortgaging is worthwhile, around 10% have no such strategy in place, while one in five rarely stick to the plans they do have.
Jenny Watts (pictured), chief operating officer at digital adviser Habito, suggested that recent hints from the Bank of England that base rate may rise before the end of the year is only likely to increase the volume of remortgages already being seen.
She continued: “Borrowers who are already on an SVR or are coming off their initial rate over the next six weeks will hopefully be looking to lock in the current low rate environment and save themselves thousands of pounds a year. However, many will be put off triggering into action because they’ve had a poor experience in the past and find the process overly complex and opaque. It is up to the broking industry to make switching as painless and easy as possible and end the inertia tax. No one should be on SVR.”
Aaron Strutt, director at Trinity Financial, noted that rates are “incredibly cheap” at the moment, with few signs of that changing even if base rate does rise.
He continued: “There tends to be more options available when borrowers switch lenders rather than opting to stay with their existing bank or building society. For example, more of the providers are offering offset mortgages and competitively priced ten-year fixes and they may not available when borrowers stick with their existing lender.”