Stephanie Charman talks remortgages: a sector that has seen a recent surge in interest from consumers because of fixed-rate lender competition and an even lower Bank of England base rate
There is no doubt that “remortgage” is currently the word on advisers’ lips. Some are even seeing remortgages now making up nearly half of their total business. After recent CACI data also surprised many by revealing that the UK mortgage market is expected to see over £14bn worth of maturities in September 2016, the time for many of your clients to remortgage could be now.
Staying in regular contact with your clients is key to creating opportunities for them to save money through a remortgage. Reviewing products with your client when their mortgage is due to come to cessation, is also essential in maintaining business levels and ensuring that you are always in mind when it comes to your client and their finances.
Timing is key, and many advisers are finding that simply reminding clients that they are there to help them make the right decision is a winning strategy. Keeping an eye out for their lifestyle events can ensure you offer a review of their finances at the right time for them and you.
A rise in the Bank of England base interest rate (BBR), something not yet seen in years, would normally be the trigger for a remortgage rush, as borrowers grab a fixed rate before SVRs climb. Instead, it has conversely been the drop in BBR which has triggered a surge in remortgage opportunities, as lenders renew competition and offer even lower rates on fixed rate deals.
Switching to a new deal might not just save your client money, but also give them the opportunity to fix their interest rate to a low figure for the next several years. As a network, we saw a big increase in remortgage business compared with last year, which shows that advisers are already making the most of the opportunity to help their client move to a better deal.
Standard Variable Rates, or “follow-on rates” as they are sometimes known, are currently sitting at somewhere between 3 and 7 per cent. Although these are still historically low, not all lenders have passed on the Bank of England base rate cut, so for some borrowers the margin between SVR and base rate has effectively increased. Meanwhile fixed rates continue to drop, which makes this an opportune time to remortgage for many clients to possibly secure a better deal and long term peace of mind.
Many lenders have also improved their systems, underwriter access and general application process to make it as efficient as possible. They recognise that with advisers so busy at the moment, saving time wherever possible is paramount to ensuring brokers and their clients are able to make the most of the remortgage opportunities available.
Barclays amongst other lenders is making the most of the recent CACI data, offering an SVR comparison tool, to provide you with a complete overview of current SVRs that some of your clients may be paying.
If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.