Homeowners are increasingly reassessing their mortgage options as a result of interest rate hikes, according to data from Legal & General.
The number of searches on Legal & General’s SmartrFit platform made on behalf of borrowers looking to remortgage after less than 6 months jumped by 31% from April to May.
The group said the increase in searches suggest that borrowers could be looking to pay Early Repayment Charges in order to lock in more favourable rates.
The research also indicates that buyers are increasingly relying on family for financial support, with a 44% jump in searches for Joint Borrower-Sole Proprietor mortgages and a 33% rise in searches for borrowers using gifted equity. At the same time, the number of Retirement Interest Only searches rose by 53%, suggesting retired borrowers may be taking out loans to support family.
Despite the difficult economic landscape, Legal & General said the buy-to-let sector was showing resilience. May saw an increase of 66% for searches on ‘Onward Loan to Value’ products from buyers with a let-to-buy mortgage and 18% from limited companies with buy-to-let mortgages. In addition, the terms ‘Holiday Let’ and ‘Air B&B’ also saw a 19% jump in May.
Jodie White, head of mortgage products and transformation at Legal & General Technology, said: “As people look to reevaluate their finances in response to ongoing cost-of-living pressures, and with an estimated 1.8 million fixed-rate deals due to end this year according to UK Finance, the remortgaging boom comes as no surprise.
“The resilience of the housing market is also a reassuring reminder that despite the headwinds facing the mortgage market and consumers in general, there is little evidence to suggest any need to panic.
“When supporting borrowers during this time, particularly those that are vulnerable or struggling to keep up with payments, it is crucial that brokers implement new technologies to help manage the current demand for financial guidance. By integrating tools such as CRM software and open data platforms into their advice process, brokers can reduce the time spent on manual tasks, and free up resource to focus on fostering good customer outcomes through high quality advice.”
