Remortgaging could release the SVR trap

DAVID FINLAY, INTERMEDIARY BUSINESS DIRECTOR, BARCLAYS
DAVID FINLAY, INTERMEDIARY BUSINESS DIRECTOR, BARCLAYS

There appears to be some supporting evidence that borrowers sitting on the perceived safety of the SVR fence are getting fidgety and looking around for a longer term arrangement.

There have been a number of stories regarding the remortgage market in the trade press recently, with the majority pointing to a positive trend.

On the flip side, figures from the Council of Mortgage Lenders state that just a quarter of all new home loans in August were remortgages, the lowest proportion in 10 years. But from speaking to brokers, there is more optimism than pessimism in the air.

There are many factors to take into consideration when looking at the remortgage market, with lending criteria, individual financial situations, interest rates and house prices all at the forefront of any potential shifts in activity.

Another important factor to consider is perception, specifically that of home owners sitting on their lenders’ SVR who believe it would cost too much to move to a better rate.

We have done some calculations and built our remortgage package which we believe could benefit around 700,000 people who feel trapped or think they are better off on the SVR.

Remortgaging may not be right for everyone but it could be for a more significant proportion than has been realised.

And who better to revisit client banks and target those who could benefit than a good holistic adviser.