Mortgage intermediaries expect remortgage activity to drive business levels over the next year, a new report from Paragon Bank has found.

Paragon’s Mortgage Intermediary Insight Report found that 74% of intermediaries believe that residential remortgage activity will be a key driver of business over the next 12 months, followed by buy-to-let remortgages (56%).

Other sources of future business include buy-to-let purchase (44%), first-time buyers (43%) and house movers (33%). Meanwhile, later life lending (33%) and equity release (21%) were also popular choices.

Remortgaging has been growing in prominence in the buy-to-let market this year as it marks five years since changes to mortgage underwriting regulations helped drive the growth of five-year fixed rate mortgages.

As part of the research, brokers were also asked what changes, if any, they have made to adapt to this shift towards remortgage business.

Just over four in 10 (41%) of intermediaries said they are placing a greater focus on client communication towards the end of the mortgage term, with brokers proactively engaging with borrowers 4.5 months ahead of product maturity, on average.

A further one in 10 (11%) of firms reported having streamlined compliance procedures, while just over one in 20 (6%) have put in place dedicated advisers to deal with remortgage business.

Brokers also provided insight into client behaviour with regards to remortgaging, revealing that they think just over half (52%) of borrowers move to a new lender at product maturity.

Asked what they feel their client’s top priorities are when deciding to remortgage, product rate, product fees and ease were deemed to be most important to borrowers after being identified as top three priorities by 91%, 63% and 45% of brokers respectively.

Richard Rowntree, Managing Director for Mortgages said: “In 2017 the introduction of new underwriting standards made five-year fixed rate mortgages more popular amongst borrowers.

With many of these loans now maturing, a rise in remortgaging was something we had expected and planned for.

“It is interesting to see that our experience has been shared by our intermediary partners and that many have been putting in place measures to adapt to this shift in business mix. Although rates and fees are unsurprisingly primary drivers behind borrowers’ decisions when remortgaging, we also see that aspects outside of cost, such as ease, speed and service, are also priorities. This highlights the benefit to the sector of improving the maturity and remortgage experience for customers”

For further information contact:

Jordan Lott
Media Relations Manager
Tel: 0121 712 2319
www.paragonbank.co.uk 

Notes to editors:

Paragon’s Mortgage Intermediary Insight Report can be found here.

Paragon lends to private individuals and limited companies and has mortgages suitable for single, self-contained properties, as well as HMOs and multi-unit blocks. Paragon can accommodate higher aggregate lending limits and more complex letting arrangements including local authority leases and corporate leases along with standard ASTs.

Paragon introduced its first product aimed at the professional property investor in 1995 and is a member of UK Finance, the Intermediary Mortgage Lenders Association (IMLA), National Landlords Association (NLA) and the Association of Residential Letting Agents (ARLA). 

Paragon Bank PLC a subsidiary of the Paragon Banking Group PLC which is a FTSE 250 company based in Solihull in the West Midlands. Established in 1985, Paragon Banking Group PLC has over £12 billion of assets under management and manages over 450,000 customer accounts.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ.