A rising number of borrowers are choosing to remortgage to another lender when they reach the end of their fixed rate deal as competition heats up, data from mortgage network Primis shows.
For several years product transfers have dominated when it comes to refinancing, but brokers at Primis say remortgage volumes are set to rise significantly in 2025.
A poll carried out by the network found two in five advisers are already seeing a “noticeable increase” in customers switching lender and 93% said they expect to see higher remortgage volumes over the coming year.
According to data published by UK Finance, in Q2 2023 some 84% of remortgagors remained with their current lender instead of moving elsewhere.
As two-year terms mature, 38% of brokers reported that customers were opting to switch to a new lender, having now adjusted to higher monthly repayments.
Those coming of five-year fixed rates, meanwhile, are still likely to see their monthly repayments go up significantly.
Craig Hall, director of strategic partnerships at Primis, said: “We’ve just seen the Bank of England slash the base rate from 4.75% to 4.5% at its first monetary policy committee meeting of the year.
“That’s driving a real bump in competition, with most lenders rushing to cut their own rates off the back of it. Switching to a new lender could be a better solution than sticking with their existing lender.
“While product transfers do mean it’s possible to switch to a new deal without a full re-underwrite, many lenders don’t allow for any change in term or switching to part and part or interest-only temporarily.
“For many borrowers facing a big step up in repayments, that could mean extending their term to absorb those higher costs.
“This highlights the reason for customers to seek independent advice to review both their mortgage and protection needs remain adequate and is another reason remortgage volumes are going to stage a real recovery over the coming months.”
