Borrowers on a Standard Variable Rate mortgage could save thousands of pounds by remortgaging to a new deal, according to a new campaign by Legal & General Mortgage Club.
The distributor is calling on advisers to encourage their clients to take advantage of record low fixed rates by remortgaging now. Intermediaries will be supported by new literature from Legal & General to help encourage borrowers to consider remortgaging, including leaflets and email templates to contact existing clients.
The campaign follows the Bank of England’s decision to lower the base rate in August, which was preceded by lenders pricing in the cut by reducing their SVRs and fixed rate mortgages to record low levels. Analysis of 2-year and 3-year fixed rate mortgage data by Legal & General has shown that on average rates have fallen by 0.2% since the beginning of 2016.
However, despite some reductions in SVRs following the base rate cut, around half of the lenders in the market have failed to pass on the change to their variable rate products. Borrowers on these rates would benefit the most by speaking to an adviser and switching to a new fixed rate deal, which could potentially save them nearly £1500 a year on their mortgage repayments.
More : Remortgagors take advantage of post-Brexit rate cuts
Jeremy Duncombe, Director, Legal & General Mortgage Club said:
“With record low fixed rates dominating the market and thousands of great mortgage deals out there, now is the perfect time for your clients to consider remortgaging. Borrowers on an SVR or coming to the end of their existing mortgage term have the potential to save thousands of pounds on their mortgage, the equivalent of a monthly pay rise or a family holiday at half term.
“However, in spite of the great deals available, the unpredictable and complicated nature of the mortgage market can make the idea of switching mortgage a daunting task for many borrowers.
“At Legal & General, we think now is a great time for advisers to show their worth, which is why we’ve created a suite of marketing material to support our brokers, an example of which can be found on our website here. Brokers should look to contact their books and build long-lasting relationships with borrowers by helping them to navigate through the thousands of products in the market and secure a new deal on their mortgage.”
Courtesy of Financial Adviser