Brokers should act now to take advantage of big year for remortgages

However, while purchase business has understandably been the dominant preoccupation for most advisers of late, it’s important not to overlook the potential offered by the remortgage market in the months ahead.

A big year for remortgages

Data produced by CACI shows that 2021 should be a big year for remortgage activity, with a total of £183.2bn of mortgages maturing this year. There are certain points over the year which will see particularly pronounced numbers of mortgages finishing their initial fixed or variable period. In October, for example, around £29bn of mortgages will move onto the standard variable rate.

That’s a vast number of clients, both existing and potential, who face the unpleasant possibility of moving onto a more expensive mortgage rate at a time when their finances could easily already be stretched by the ongoing effects of the pandemic.

Lender repricing

What’s clear is that lenders are only too aware of the potential size of the remortgage market in the months ahead. Recent weeks have seen a host of lenders from across the industry, whether big names or smaller specialist outfits, reviewing their pricing and incentives in a bid to make their remortgage proposition more attractive.

The lenders themselves will be only too keen to tap into this market of borrowers who don’t want the bill shock of moving onto the SVR, which is why it’s so vital for intermediaries to be proactive here.

It’s not enough to rely on your clients to remember how simple the process was when they used you in order to find their original deal, and then come back to you once again for their remortgage. It’s down to individual brokers to open that remortgage dialogue well in advance of the maturity date, not only reminding those clients of your presence but also re-emphasising how making use of your expertise will leave them better off in the long run.

Moving swiftly

There’s no escaping the fact that the product transfer market has become more significant in recent years. The latest data from UK Finance shows that around 150,000 product transfers took place in January, up by more than a quarter on the same period of last year and the highest monthly number on record.

Of course, for some clients the idea of a product transfer will be a compelling one. The fact that the client already knows the lender, and that there isn’t going to be a formal assessment of their financial position may be appealing given the turmoil of the last year and a half.

This won’t be the case for everyone though, with the wider range of products on offer through a remortgage meaning bigger savings for the client. What’s more, there is no reason that a remortgage has to take much longer than a product transfer.

At eConveyancer, focusing on ways to speed up the remortgage process has been a big focus, which is why last year we launched our Rapid Remortgage service. Qualifying borrowers are sent a starter pack, and once this is completed and returned, the solicitors make the case a legal certainty - subject to a mortgage offer from the lender - within just 24 hours.

It’s led to some incredible turnarounds too, with our quickest case to reach this state so far taking less than 30 minutes, and the fastest full completion taking a paltry four days. While the speed of a product transfer can make it attractive, the reality is that if brokers partner with the right legal firms then they can help their client land an even better rate through remortgaging, without having to put up with a lengthy, dragged out process.

It’s also worth remembering that most solicitor firms have separate teams for remortgage cases from purchase deals. It’s no secret that many solicitor firms have had to deal with significant workloads in the run-up to the Stamp Duty deadline, but this division of business means that introducing a remortgage case won’t mean your client is stuck at the back of an already full pipeline.

The purchase market has understandably been front and centre in broker workloads during 2021 so far, but there are huge numbers of prospective remortgage clients who would benefit from advice. By moving swiftly, brokers can secure their business not just for this current mortgage switch, but for all of their future mortgage needs too.