View more on these topics

Good outlook whatever the economic climate

Caroline Havers, partner, client Relations, Salans solicitors Will the popularity of remortgaging continue if market conditions change? I think so, whether the economic climate remains stable or worsens.

If the climate remains benign, with interest rates and unemployment rates low, consumers will want to continue accessing the £2 trillion worth of equity that exists within UK properties. The attractive rates on offer will also make borrowing against equity much more attractive than an unsecured loan and the cost of remortgaging will not dissuade borrowers as most lenders cover fees.

A downturn in the economic climate must be seen against the backdrop of the stable economic climate of recent years – some of us can still recall the days of interest rates of 12% or even 15%. If interest rates rise by more than half a point over the next few months many homeowners will seek to remortgage in order to fix their mortgages for a fixed period, though probably not as long as Professor Miles would advocate. Three to five-year fixed rates will enable people to manage their outgoings with more certainty and still keep brokers happy with the prospect of repeat business.

The continued growth of the remortgage market is also likely to be spurred on by the lenders and brokers who use it as a means to increase their customer base and achieve growth targets. Consequently they will continue to bring attractive products to the market.

The final factor that will act to secure the future of remortgaging is that the process has become part of what consumers see as ordinary personal financial maintenance. Two decades ago a mortgage was for life but in the 21st century shopping for a better mortgage deal is seen as a sensible option to save money or release equity.

So whether rates rise or fall, I believe remortgaging will continue to grow and to offer increased opportunities to consumers, lenders and brokers.

Recommended

Abbey aims for flexibility

Abbey for Intermediaries has extended completion deadlines from three months to six months on all new variable rate tracker business as part of a drive to offer more flexibility to clients and to smooth the process for intermediaries. The deadlines came into effect for applications made by intermediaries from March 15 this year. Intermediaries are […]

Lenders face up to the remortgaging paradox

Roger Hillier, product development manager at Mortgage Express Last year was the year of the remortgage and the figures speak for themselves. In 2003 industry figures demonstrated that the gross value of remortgaging was £120.8bn – an increase of 50% over the previous year. Remortgaging has undoubtedly become commonplace across the mainstream and specialist sectors […]

RAMP launches first exclusive product range

The Regulatory Alliance of Mortgage Packagers has launched its first range of exclusive products. A cashback buy-to-let tracker, a cashback self-certification tracker and a non-conforming minor adverse self-certification product. The mortgages are being introduced with the support of Platform and are only available through RAMP members. The alliance believes that the three products are among the […]

London Scottish Mortgages appoints management team

London Scottish Mortgages has appointed a management team ahead of its planned relaunch at the Mortgage Business Expo in May. LSM&#39s team will be led by Kevin Cooke as head of secured lending, with Martin Coates assuming responsibility for sales and marketing activity. They replace the previous directors, Mike Rashman and Carl Montlake, who have […]

Newsletter

News and expert analysis straight to your inbox

Sign up