Is you mortgage on SVR rate? read this........



James Best Jan 15

With an increase in base rates now not likely until 2016, the price war between lenders continues with an aim to drive up lending volumes in a market that currently requires that external stimulus.

January saw short, medium and long term fixed rates fall to record low levels, and yet 50%+ of UK mortgages are reported on be on SVR. Yes, some are on attractive deals, but the majority would benefit significantly from remortgaging, and that thinking needs to be stimulated by the intermediary.

From what the lenders are telling us, much of the remortgage business they are currently doing is for customers just coming out of an existing product, rather than those that have been on SVR for some time. Have we forgotten those that came up for a remortgage review during the recession when there were limited attractive options available, and are we really being that efficient in ensuring all current and future reviews are kept on top of?

Remortgaging is the domain of the intermediary, however it feels like apathy has set in with borrowers and intermediaries, with both appearing to wait for signs of a base rate increase before deciding to act. Yes, you may see competition on price continue in the run up to the election, and maybe beyond, but we are now in the price zone that all our customers need to be advised is highly unlikely to ever be repeated.

Research that tells us borrowers can probably cope with a 0.25-0.5% rate increase in terms of affordability, but they are confusing a base rate increase with pay rate increases, and from these record low levels, the increase in pay rates in the run up to a base rate increase would have a noticeable impact on all borrowers.



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