Remortgaging: Timing may not even matter this time

Just recently a friend of mine, who was in the midst of their fourth or fifth remortgage on their residential property, remarked that for the first time they felt they had ‘got it right‘.

It felt like an odd comment to make, given they work in the finance sector, they’ve always used an adviser and you’d think they were absolutely au fait with their mortgage product options and what they required.

So I asked what they meant. It turns out they are one of those fortunate borrowers that lenders appear to have been falling over themselves to get recently. Their next remortgage is below 60% LTV, and they’ve secured a below one per cent fixed-rate over five years.

In my friend’s mind, that feels like good business. However, they will also freely admit that securing this mortgage is way more to do with luck and timing, than any sort of judgement on their part.

It just so happens their current mortgage deal comes to an end next month, and because of this (and their situation) they’ve been able to secure this deal. In other words, they’ve got it right in the sense they’re in the right spot at the right time.

Previous remortgages haven’t felt like that. There was the option to go with a 5.25% fixed-rate just before the credit crunch and the subsequent decision by the MPC to cut rates. There was a decision a few years prior to that when they opted for a variable rate that tracked BBR – over the next two years the MPC steadily upped rates.

They were beginning to think that all remortgages might end up with them feeling slightly short-changed. But not this time and especially since the inflation figures have come through and there is much talk about an increase in BBR perhaps even before Christmas.

Grass is always greener

This experience got me thinking about what people who are not in this situation might currently feel. Those who perhaps remortgaged last year and are now seeing the ultra-competitive rates available and perhaps cursing their luck. Or those who pre-pandemic took out a five-year fixed-rate at levels far above what is available now. Or those who might not come to the end of their deal until sometime next year and might be wondering what rates will look like then?

Given how important the monthly mortgage payment is to so many people, we should not be surprised to see the level of interest there is in our market, to have people even now somewhat regretting the mortgage products they opted for years ago, and to perhaps be wondering whether their existing deal is still the right one for them, or if ultimately they can save money by moving. How good is that for advisers?

As an advisory community that is a groundswell of interest and engagement that few other sector professionals have the fortune to be able to tap into. To be able to actively communicate with both existing, and potential new, clients and to be able to talk to them about their options, even if they have only recently gone through the process.

Add in the fact our market can move incredibly quickly and it’s possible to see how far this can take you and the services and products you can provide. We should never underestimate just how important ‘the mortgage‘ is to everyone who has got one, or the deep-seated willingness to ‘shop around‘ in the anticipation of cutting those costs. It’s always a door worth pushing open to find out what’s inside.