"Consistent and clear communication from all parties - lenders, packagers, and brokers - is so important to keep clients on track and avoid missed opportunities for better deals."
There’s been a lot of talk about the expected growth in the remortgage market in 2025, but it’s just as important for mortgage brokers to keep product transfers (PTs) in mind, especially when advising complex clients.
Remortgage business is set to grow by 30% and hit £76bn this year, according to UK Finance, while the PT market is also on track to grow, albeit at a smaller 13%, to reach £254bn.
Both markets saw a dip in volumes last year. The remortgage market saw a 10% drop, while PT volumes were down 7%, according to the trade body.
While many brokers will welcome a more competitive remortgage market this year, along with higher proc fees, a healthy mortgage market is all about balance. This means lenders need to offer a strong mix of both remortgage options and PTs - and pay a proc fee for PTs, which is exactly what we do.
For complex borrowers in particular, a PT might be the better option, especially if they struggled to find a lender willing to lend to them initially.
Take a borrower over the age of 70 for instance, who already has a limited pool of lenders to choose from. Their options could be even more restricted if they’re on an interest-only mortgage for example. Similarly, a borrower might be on a joint borrower, sole proprietor (JBSP) mortgage, or be a high-net-worth (HNW) individual living overseas with multiple business incomes in different currencies.
Not all lenders will consider such applicants, and if it’s only been a couple of years since they last remortgaged, their situation might not have changed much. As such, they could benefit from a PT when their deal comes to an end. Lenders also usually won’t carry out an affordability check if the borrower is borrowing the same amount over the same mortgage term.
We’ve recently lowered our PT rates, and since they currently don’t carry a product fee, a PT might not only be more cost-effective than the standard variable rate (SVR) but also cheaper than remortgaging elsewhere. Ultimately, it’s about doing what’s best for the client.
Still borrowers moving onto SVRs
Most brokers are well-practiced when it comes to contacting clients in advance of their current mortgage deal ending. As an industry, we’ve also made great strides in recent years in reducing the number of borrowers who roll onto their lender’s SVR.
Ten years ago, just over two million borrowers were on their lender’s SVR, according to UK Finance. That number dropped to 1.3 million in 2019 and has since fallen to approximately 600,000 today.
Our figures show that some clients fall onto the SVR when their deal comes to an end, but for many of them this will not be the best outcome. So, how can we work together to make sure this doesn’t happen?
While I can only speak for ourselves, I do believe most lenders do their best to keep brokers informed before their client’s deal comes to an end. Our first step is to notify the broker around four months before their client’s deal ends and share details of our available products.
We do the same the following month. If we don’t hear back, we follow up with letters to both the client and the broker, and again one month before the deal ends.
If the case originally came through a packager, we also contact the packager, who will hopefully pass the information on to the broker. Yet, there are times when we’re met with radio silence.
It’s not always clear why we don’t hear back, perhaps it is that the originating broker is no longer working, or maybe life simply gets in the way for those along the chain, leaving them too busy to follow up.
This is why consistent and clear communication from all parties - lenders, packagers, and brokers - is so important to keep clients on track and avoid missed opportunities for better deals.
Why PTs matter
PTs can play a key role in helping brokers maintain and build strong relationships with their clients. It’s about being there for the client throughout their financial journey, not just at the start. By offering PTs as part of your service, you’re helping to keep that bond strong and preventing the client from turning to another broker when their deal ends.
So, while the market may expect a stronger remortgage market this year, it’s equally important for brokers to ensure PTs remain a core part of their offering.
