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Why I don’t foresee a remortgage boom

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Last month, Mortgage Strategy carried a story in which brokers forecast a remortgage boom in the coming year or two. The piece included research from Mortgage Advice Bureau, which predicted an increase in remortgage lending from £55bn in 2013 to around £80bn in 2016, arguing that rising house prices and an increase in base rate will attract more borrowers back to the market.

But I, for one, do not foresee a remortgage boom on the horizon.

I appreciate that fixed rates have tumbled of late and that the base rate can only go one way, so tying in now is a good idea. However, most of my clients do not want to lose their interest only loans, their lifetime trackers or want their mortgage going passed state retirement age.

This has been a conundrum for a while now and until we get a loosening in criteria, it will remain a major stumbling block to the remortgage market really taking off.

Mortgages have to be a perfect combination of rate and criteria and as we have seen in the past at HSBC, having the sexiest rates and the strictest criteria is not a licence to print mortgages.

Answers on a postcard via Mortgage Strategy.

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  • Andy 1st October 2014 at 1:25 pm

    Generally, the main reason for remortgage is to get a better rate. Clients will only want to keep their lifetime trackers whilst they are competitive. It worries me that most of your clients would need to borrow into retirement to be able to afford the mortgage should they need to remortgage and also the fact that most of your clients are on interest only. I guess I am lucky that most of my clients will look to remortgage when it is suitable for them to do so, without the fear of losing their repayment mortgages, moving off no longer competitive trackers or the worry of being able to afford the mortgage without taking it beyond state retirement age. I don’t necessarily agree with MAB’s prediction but I would hope that their are a lot more people out there with their finances suitably positioned to be able to remortgage should they wish to.