Remortgage activity surges as borrowers try to beat further rate rises

February saw a spike in remortgaging activity as borrowers sought to beat interest rate rises, according to new research from Legal & General Mortgage Club’s SmartrCriteria tool.

Related topics:  Mortgages
Rozi Jones
8th April 2022
house home arrows growth mortgage
"The cost-of-living squeeze and rising interest rates are clearly driving borrowers to remortgage and lock into low fixed-rate products that are still available on the market."

Searches for homeowners wanting to remortgage after just six months climbed by 30%, suggesting that rises in the Bank of England’s base rate to curb inflation could be prompting borrowers to lock into low fixed-rate deals.

The data shows that strong demand from buyers also continued, particularly in the buy-to-let sector. Searches for first-time landlords continued to climb, rising by 23%, and searches for those with corporate lets grew by 28% in February.

As house prices continue to soar and rising energy costs hit affordability, borrowers are becoming increasingly reliant on financial support from their loved ones to complete their purchase plans. Searches for those with gifted equity jumped by 119%, and searches from landlords with gifted equity followed this trend, climbing by 15% in February. Searches by advisers for borrowers with gifted deposits similarly increased by 6%, perhaps suggesting that the cost-of-living squeeze has resulted in first-time buyers needing a bigger deposit for completion.

Legal & General Mortgage Club’s data also suggests that families could be lookings to alternative options to either minimise their monthly outgoings or free up cash to help their loved ones with a deposit as house prices rise and the Help to Buy programme enters its final year. Searches for interest-only mortgages grew by 33% in February.

Kevin Roberts, director of Legal & General Mortgage Club, said: “The cost-of-living squeeze and rising interest rates are clearly driving borrowers to remortgage and lock into low fixed-rate products that are still available on the market. Others are exploring alternative means of managing their finances, perhaps by taking out interest-only mortgages. Whether borrowers are looking for alternative solutions or simply want to lock into a fixed-rate mortgage for the future, advisers have a critical role to find products for these borrowers that can help them keep their monthly repayments low, while ensuring they have a mortgage that continues to meet their needs.

“As advisers seek to support many of their clients to find new mortgages, technology remains key to processing these requests quickly and efficiently. Research tools that consider criteria, affordability, and products are an ally to intermediaries, helping them match clients that have a broad range of borrowing needs with the right lenders. Taking advantage of these capabilities will put advisers’ businesses in a good position to help them thrive and, importantly, allow them to spend more time giving great advice to their customers.”

More like this
Latest from Property Reporter
Latest from Protection Reporter
CLOSE
Subscribe
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.