Last week the Bank of England announced a drop in the base rate, taking us to a new historic low of 0.25%. As you know, the savings will take time to filter through to the 29% of customers currently on their lenders SVR, but for the 1 in 5 customers that are currently on tracker mortgages, they’ll benefit from immediate reductions.

With the prospect of lower rates, you may have had an influx in re-mortgage enquiries. However, there’s a group of customers for whom a re-mortgage just wouldn’t make any sense. As this group don’t get much press, we’ve had to coin our own term for them – “Happy Trackers”. With the base rate at a new historic low, this section of the mortgage population will be enjoying base tracker deals that have seen their monthly repayments plummet to an all-time low, thanks in some cases to an interest rate less than 1%!

But it’s not all good news for “Happy Trackers”. Unlike their less-happy counterparts, when they’re looking to make costly home improvements, pay down high interest unsecured debts or perhaps fund their own business, a re-mortgage may not be in their best interest. That’s because they could be increasing the cost of their existing borrowing by moving away from their favourable rate. In this scenario, a second mortgage could be the best option for your client.

The second mortgage market is often overlooked and as such, “Happy Trackers” may well have delayed their home improvement ambitions, or be shopping for funds in the unsecured loan market, which is often unsuited to larger sums (assuming they’re available in the first place).

Not only are second mortgages good for raising new funds, but we’ve also helped many customers to consolidate costly multiple debts. With the recent announcement of the reduced base rate and the knock on reductions in second mortgage rates, there’s a great opportunity for customers to reap the benefits of the current market conditions and reduce their monthly outgoings. By tackling their existing debts in this manner, we believe households will be far better equipped to weather any increase to interest rates, later down the line.

If you would like to learn more about second mortgages, and examples of when they may be suitable options for your clients, give our team a call and we can arrange CPD training for you and your teams. You can contact us on 0345 450 4678.