Remortgaging activity: Opportunities for brokers

However, it is not as simple as this for everyone. With rates rising, and the prospect of them being reduced again in two to three years’ time, some might be put off locking in now in case it does not serve them well long term. The confusion on the best course of action is clear and the time is now, for brokers to step in and provide the help and support customers need.
On the other side of the coin, lenders are having to pull products at short notice due to the current economic climate, and with the wave of expected product maturities only adding to demand, brokers are feeling additional pressure on top of existing capacity issues.

This trend is not likely to go away any time soon. With the cost of living crisis worsening and inflation set to hit 18.6%, the opportunity is there for brokers to advise clients on the right products to fit their circumstances. They play a critical role, giving a wider view of the whole market and presenting the best deals, but many borrowers are unaware of the value they can add.

The remortgaging boom

2022 would always have been a busy year for remortgaging with many residential and buy to let products maturing naturally, but these borrowers are also remortgaging in very different circumstances following the impact of the pandemic and the ongoing cost of living crisis that has seen interest rates skyrocket.

Not only does this increase the cost of borrowing, but the uncertainty in the market has led to lenders repricing products or pulling them from the market much more frequently. Data from Moneyfacts shows that the average shelf life of a mortgage product was just 17 days at the start of August – a record low. It causes further stress on the end customer too, giving them far less time to make decisions.

Brokers are perfectly placed to step in and provide support, not only because advising people on the best course of action in these trying times is the right thing to do, but because there is ample opportunity for them to establish rapport and build relationships effectively that can only stand them in good stead.

Broker opportunity

Brokers help customers find the best possible deal, and with activity elsewhere in the mortgage market slowing slightly in the summer months, remortgaging provides an opportunity for brokers to win business through an alternative pipeline. To do so, it is vital that brokers respond to changing customer habits, aligning with the wants and needs of individual clients.
Making the most of this opportunity means increasing their own visibility to both new and existing customers. On top of the usual methods, brokers have a number of tools at their disposal and should be careful not to dismiss social media as means of demonstrating their knowledge to customers of all ages. From Facebook to TikTok, the presence these platforms can provide straight to the customer’s phone is unmatched.

Keeping proactive is also crucial. Early communication to the customer, providing support and expertise before they realise they need it, reduces the possibility that they will look elsewhere while also ensuring they don’t end up on their lender’s SVR without even knowing. Indeed, the increase in remortgaging activity is already apparent and is set to continue into 2023 with over £97.9bn worth of residential and buy-to-let products set to mature before the year end. The time is better than ever for brokers to touch base with clients who’s products may be expiring or who are simply looking for a better deal.

For example, the cheapest product might not always be the best option for the customer. For instance, some might be tempted by an interest only mortgage given it lowers monthly payments. However, giving these options due consideration is vital, and a broker’s help is crucial to make sure clients have a suitable repayment strategy in place that enables them to repay the debt at the end of the mortgage term.

Everyone is different. Each customer has unique circumstances, and this has only been exacerbated by the impact of the current economic climate. First-time buyers who have just made one of the biggest financial commitments will have different concerns to a more experienced third-stepper or downsizer, but the value of the broker in providing the right, tailored advice remains. To feel the full benefit, brokers need to be prepared and proactive in today’s mortgage market, beating the competition and being a go-to source of client-support. Only then can they help customers navigate these times of financial insecurity whilst fostering and cementing client relations for the future.