Product Transfers (PTs) dominate the market for those customers coming to the end of their current mortgage deal. According to UK Finance, PTs accounted for 82% of the remortgage market in the UK during the second quarter of 2024. However, many borrowers don’t fully understand how PTs differ from remortgages. This misunderstanding could lead them to overlook opportunities that a remortgage might offer.
The latest Pepper Money Specialist Lending Study found that only 24% of people say they know the difference between a PT and a remortgage. For many borrowers, a PT may be perceived as the simpler, more convenient option. However, when presented with the consideration that a PT may not be the most appropriate option, many are more open to exploring a remortgage.
Our study revealed that only 10% of people would consider paying a higher rate to stay with their current lender just to avoid the remortgage process. Of those customers who would be happy to choose this route, the main reasons are wanting to avoid the application process (54%), valuing their existing lender’s service (34%), or believing that changes in their circumstances make it harder to qualify for a new deal (25%).
OPTIONS
PTs aren’t always the best solution, not all customers are aware of this, and brokers have an opportunity to step in and help people make decisions that are not only more informed but also aligned with their financial goals. Taking this approach could be particularly timely when you consider 2025 could potentially be a record year for maturities, and so will fuel activity from customers needing advice. While PTs have been on the rise, many customers would reconsider them if they had a clearer understanding of their options.
A remortgage isn’t just a chance to secure a better interest rate. It can also provide an opportunity to release equity from a home, which can be used for significant financial goals like home improvements or debt consolidation. For customers with adverse credit, who might feel limited in their choices, brokers can provide access to lenders who specialise in helping customers with complex circumstances.
CHALLENGES
One of the biggest challenges is helping customers see beyond the perceived convenience of staying with their current lender. Many assume that remortgaging will be too complicated or time-consuming, but brokers have the expertise to simplify the process and show that it’s often more straightforward than they fear. By explaining how a remortgage works and the potential benefits it could bring, brokers can ensure their customers don’t just sleepwalk into a PT that may not best meet their needs.
This is a crucial moment for brokers to reclaim their role in the remortgage market. By guiding customers through their options and helping them weigh the advantages of remortgaging against PTs, brokers can create real value for their customers. The next year will bring significant movement in the mortgage market, particularly for those whose deals are ending.
Brokers have an unparalleled opportunity to guide these customers, not just toward a new mortgage product, but toward better financial outcomes. In doing so, they can help customers unlock the full potential of their mortgage decisions and achieve goals that might otherwise seem out of reach.
