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50 per cent of homeowners have never remortgaged and many struggle to repay


There is a lot of focus in the news and from the government on people, especially young people, who are struggling to get on the property ladder; however, a huge number of people who are already on it are struggling when they do not need to.

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Research from L&C Mortgages has revealed that 1.4 million people in the UK are struggling to pay their mortgages. Almost twice this number feel that their payments are too high; at the same time, 58 per cent of UK mortgage holders have never remortgaged.

Benefits of remortgaging

After an initial period – usually two to five years – mortgages revert to a less-favourable rate, usually referred to as a standard variable rate (SVR). Many people misunderstand the term and believe that an SVR mortgage will be similar to their previous tracker mortgage; however, this is not the case. The base rate of an SVR mortgage is set by the lender rather than the Bank of England and almost any other mortgage will be at a better rate.

Remortgaging also allows borrowers to take advantage of periods when interest rates are likely to rise by taking fixed rate mortgages at favourable rates. As payments have been made, and property prices may have increased, remortgages will often be at a more favourable loan to value ratio, leading to even more favourable rates.

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When remortgaging, the term of the mortgage can often be varied; for example, the term can be increased if a borrower is struggling to make payments, reducing the monthly spend. Alternatively, the term can be reduced if the client wants to take advantage of a low interest rate period to pay down the loan.

Identifying clients who could benefit from remortgaging

Your back office systems for financial advisers, such as those from https://www.intelliflo.com/ will identify, or help you to identify, customers who will benefit from remortgaging. They do this by tracking customer information, mortgage status, and even reminding their adviser when remortgaging might be an option.

Almost anyone who has held a mortgage for more than a few years can probably benefit from remortgaging, generating business for financial advisors and, more importantly, ingratiating clients by proactively saving them money.

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