January saw short, medium and long term fixed rates fall to record low levels, and yet 50%+ of UK mortgages are reported on be on SVR. Yes, some are on attractive deals, but the majority would benefit significantly from remortgaging, and that thinking needs to be stimulated by the intermediary.
From what the lenders are telling us, much of the remortgage business they are currently doing is for customers just coming out of an existing product, rather than those that have been on SVR for some time. Have we forgotten those that came up for a remortgage review during the recession when there were limited attractive options available, and are we really being that efficient in ensuring all current and future reviews are kept on top of?
Remortgaging is the domain of the intermediary, however it feels like apathy has set in with borrowers and intermediaries, with both appearing to wait for signs of a base rate increase before deciding to act. Yes, you may see competition on price continue in the run up to the election, and maybe beyond, but we are now in the price zone that all our customers need to be advised is highly unlikely to ever be repeated.
If we wait for the first 0.25% base rate increase to act, then it is likely that fixed rates may be 2%+ more expensive! I have seen research that tells us borrowers can probably cope with a 0.25-0.5% rate increase in terms of affordability, but they are confusing a base rate increase with pay rate increases, and from these record low levels, the increase in pay rates in the run up to a base rate increase would have a noticeable impact on all borrowers.
If you are a business owner and your advisers are busy with new business leads that maybe generate a higher case value, then take on a specialist to carry out the reviews. Even if your customers are not able to remortgage due to change in criteria or their circumstances, they will welcome the contact, and you can always review their protection needs. Leave them any longer without contact and you will lose them rather than retain them for life.
If you are giving your remortgage leads to a different/specialist adviser, then find one with strong protection skills, as they will generate a far better case size than is normally associated with remortgages, and by doing so deliver a far better service to your customers. Also don’t think you can’t charge your clients a fee on a remortgage just because you may not have done so when arranging the original mortgage. The world has changed and so has the work involved, so charge what you are worth - your clients will understand.
