The remortgage and product transfer (PT) opportunity

To say that the mortgage market, and the options it currently has available to all types of borrowers, is something of a national obsession right now, I think would be a slight understatement.

Of course, we’ve always been very keen on discussions around property, notably house prices and values, and what our neighbours are doing, but this feels like a shift-change and is without doubt the consequence of over a decade of ultra-low interest rates, and the relatively recent and quick move away from this towards much higher-priced products.

First-time buyers will be looking at this current market and wondering why they are trying to buy for the first time now, rather than a couple of years ago, but it is perhaps existing borrowers coming to the end of their deals in 2023 and 2024, who will be feeling the discomfort the most, and potentially wondering how they find the extra money required to fund their monthly mortgage payments given the current rates available.

It’s perhaps no wonder this has been the subject of many front pages, and many political discussions recently, because a large part of this feels like the consequence of Government economic policies, and potentially, a Bank of England that was too slow to act.

The fate of borrowers and, specifically, the difference in mortgage payments they might have to stomach compared to their last mortgage deal, has been a heavily politicised topic of conversation in recent weeks,

Indeed, I’m sure you’ll agree, most advisers would argue that previous Governments of all hues have been very keen to talk to the big mortgage banks and lenders, but perhaps have paid too little notice to those who are at the front line in trying to find the right solutions for borrowers, particularly over the last 12-18 months when the mortgage market has been so tumultuous.

Indeed, you may also feel that advisers have been overlooked or, perhaps, not listened to even though it is advisers who are having to find the right product solutions, who are having to meet the higher affordability obstacles, who are having to explain why the higher rates, rather than the one or two per cent of yesteryear.

In addition, it is advisers who also have to deal with lender service issues and delays, very short notice product withdrawals, and clients who may well be somewhat bewildered at the rate of change and the lack of time they appear to have in terms of deciding which recommended product to choose.

However, at the same time, it is this remortgage/product transfer (PT) sector that is perhaps the most important to advisers, given the sheer number of borrowers who come off previous deals each month, but also in terms of what it allows advisers to cover – financial wants and needs beyond the mortgage, and therefore the opportunity to save client’s money in other areas.

It’s for this very reason we have a specific Remortgage & Product Transfer Hub for member firms with sales guides and aids, resources and specific lender criteria information, all designed to be a one-stop shop for advisers dealing with those existing clients coming to the end of their deals.

And, of course, we all know how important this ‘recurring’ business is and the fact that, not only do clients expect constant communication from their adviser to make them aware of their situation and what might be available to them, but advisers continue to compete with the existing lender, who are now much more likely to contact the borrower four/five/six months’ in advance of the end of their deal, offering them PT rates.

To help in this regard, you can utilise the remortgage review module within The Key which identifies cases due for review, provides an indicative price for a replacement product (where possible), and emails the client directly to initiate contact.

That continued focus on the remortgage options available is vital, especially in a marketplace where many borrowers might feel they only have PTs from their existing lender to fall back on and very little else. Advisers know only too well that income generated from PT business is far less than a remortgage, and therefore presenting available options from other lenders at an early stage, should signal to the customer they do have a greater degree of choice than they might think.

Overall, in a marketplace where purchase business is not the force it was two/three years ago, existing clients/borrowers assume an increased importance. Plus, they genuinely want advisers to contact them and spell out the market choices they have; they were, after all, confident in your service last time round. There’s no excuses for not letting them know you can provide the same again, in fact, they should have no doubt who should be servicing their mortgage needs this, or indeed any, time.

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Anita White

Head of Lender Relationships