"Too often, borrowers perceive PTs as the simpler, more convenient option. But when presented with the potential benefits of a remortgage, many become open to exploring alternatives. "
After years of product transfers (PTs) dominating the market – they accounted for 82% of the remortgage market in the UK during the second quarter of 2024 – this year looks set for the resurgence of the remortgage.
According to UK Finance, ‘external’ remortgaging is forecasted to grow by 30% this year – a sharp contrast to the 13% predicted growth in PTs and the 10% growth expected in lending for house purchases.
It’s a significant change to the market we’ve known in recent years. The predicted growth in external remortgaging isn’t just a statistic, it’s a signal that borrowers are starting to look beyond the perceived convenience of sticking with their current lender. For brokers, this is a chance to reclaim a vital role in helping customers navigate the complexities of the mortgage market. You can ensure they don’t settle for options that may not be in their best interests, for both their finances and life goals.
The resurgence of the remortgage is good news for everyone. For customers, it provides access to more competitive rates and opens up opportunities to achieve their broader financial goals. For brokers, it’s an opportunity to demonstrate expertise and value of professional advice.
The truth is that many customers still don’t fully understand the difference between a PT and a remortgage. Only 24% of people in our latest Pepper Money Specialist Lending Study claimed to know the distinction. There’s a vacuum of understanding amongst customers that brokers can fill with professional advice tailored to their specific circumstances and goals.
Too often, borrowers perceive PTs as the simpler, more convenient option. But when presented with the potential benefits of a remortgage, many become open to exploring alternatives. Only 10% of people in our study said they’d consider paying a higher rate to avoid the remortgage process and stay with their current lender. Even amongst those who might choose this route, it’s often driven by misconceptions – such as a belief that the remortgage process is overly complex, or concerns that changes in their circumstances make it impossible to qualify for a new deal.
Importantly, remortgaging isn’t just about finding a better interest rate. It’s an opportunity to unlock capital within their property. Releasing equity through a remortgage can enable borrowers to pursue major financial goals, such as home improvements or debt consolidation – two themes likely to dominate in 2025 as households continue to grapple with the cost-of-living crisis. For growing families or changing lifestyles, renovating a home can be more practical and cost-effective than moving. Meanwhile, consolidating debt can help borrowers streamline their outgoings and restructure their finances to regain control.
Brokers are perfectly positioned to dispel these myths and show borrowers that a remortgage can often be simpler and more rewarding than they think. Recent missed credit payments may see a remortgage application rejected by a high street lender, but there will still be opportunities for those customers who just miss out on a high street mortgage amongst lenders that are only available through brokers.
Specialist lenders like Pepper Money are ready to support brokers in helping their customers achieve these goals. For example, at Pepper, we take a hands-on approach to assessing affordability and this means we don’t have to apply strict limits on debt-to-income ratio (DTIR). Instead, we assess each application on its individual merits, taking into account the full context of the customer’s financial circumstances. So, if there’s evidence that a customer’s mortgage payments would be sustainable, despite a high DTIR, we may still be able to offer the loan size they need. This can prove a particularly valuable approach for those looking to consolidate unsecured debts.
The challenge lies in helping borrowers move beyond the perceived convenience of staying with their current lender. Many customers simply don’t realise the potential benefits of a remortgage because they see it as time-consuming or overly complex. This is where brokers play a crucial role. By simplifying the process and highlighting the value a remortgage can bring, brokers can help their customers make informed, empowered decisions rather than sticking with the status quo.
We firmly believe that 2025 will be remembered as the year that remortgaging made its return. The resurgence of the remortgage is a huge opportunity for brokers with more customers needing professional advice. We would encourage you to reconnect with your customers and show them how a remortgage can unlock new opportunities to achieve their financial goals.
