LMS – Remortgagors benefit from broker advice as economic uncertainty lingers
A high percentage of borrowers are utilising a mortgage broker when they remortgage as economic uncertainty continues, according to the latest figures from LMS.
Similar to last month, 67% of borrowers picked a remortgage product because it had been recommended by a broker.
LMS says this is a “remarkable increase” from November 2018 when just 39% of borrowers chose a product due to broker recommendation, adding that the sustained growth £reflects the importance of brokers in the modern remortgage market and the value of advice”.
Those who remortgaged in June saw their average monthly payment decrease by £202, and 46% took out a five-year fixed rate.
Two-year fixed rate products remain the second most popular option, making up 37% of purchases in June.
LMS says this preference is unsurprising given consumer expectations regarding interest rate rises, with 59% of borrowers expecting bank rates to increase in the next year.
Nick Chadbourne, CEO of LMS, said: “Remortgage volumes continue to remain near a 12-month high. Last month saw volumes reach a peak of 54,624, while June only saw a small drop to 53,516. This is a particularly strong sign the market is in good health, considering borrowers tend to turn their focus towards holidays and trips away with family during the summer period.
“It’s great to see that brokers are a large part behind this drive, with 67% of borrowers choosing to remortgage because it has been recommended by their broker.
“With wider economic uncertainty still lingering, five-year fixes continue to grow in popularity, with 46% of borrowers opting for this product, up from 44% last month. In comparison, over a third (37%) chose a two-year fix.
“As we move into the summer months, both new enquiries and completions are likely to continue growing. This is particularly the case in the South East, which saw the highest number of completions this month.”
Source: Financial Reporter