90% of brokers keep records of customer maturity dates
Some nine out of 10 (90%) intermediaries keep a record of customer maturity dates ,allowing them to proactively reach out to discuss remortgage options at the appropriate time, Paragon’s latest Financial Adviser Confidence Tracking (FACT) Index has found.
In terms of contact, half of intermediaries said they always contact customers as they approach the end of their current arrangement and one third said they usually do so.
On average, intermediaries said that 43% of their customers chose a product switch with their existing lender rather than remortgaging when their mortgage reached maturity.
John Heron, managing director of mortgages at Paragon, said: “These findings demonstrate the important role intermediaries play in encouraging competition and choice in the mortgage market, offering a proactive prompt to customers to review their options at the end of their current deal.
“What’s interesting is how intermediaries encourage customers to weigh the benefits of a switch product with an existing provider against a remortgage with a new lender when deciding what action to take.”
Interestingly, two thirds of intermediaries said they would never or only rarely recommend a product switch at a higher rate, while one third said that they would do so in certain circumstances for the benefit of convenience.
The findings come at an interesting time as the FCA completes its current Mortgage Market Study, due to report at the end of 2018, looking at consumers’ ability to make effective choices when selecting a mortgage.
In an interim report in May, the FCA pointed to high levels of consumer engagement in the mortgage market, with over three quarters of customers switching to a new mortgage deal within six months of moving onto a reversion rate.
The final FCA report is expected to identify ways in which technology can enhance customer choice.
It has already encouraged an initiative to improve the experience of ‘mortgage prisoners’ – those left servicing a mortgage on a relatively high reversionary rate. This is because market-level changes to mortgage affordability left them unable to switch to a better deal.