Loyalty is dead for remortgagers
More than eight in 10 (82%) borrowers who remortgaged did so to switch lenders and get a better deal.
But in spite of the cost of attracting new customers just 3% of lenders offered their existing customers incentives to stay.
Almost two in five (39%) remortgagors spoke to an independent mortgage adviser or broker in March, up from 36% in February.
Andy Knee, chief executive of LMS, said: “Savvy borrowers are shopping around for better deals and are clearly aware of the competitive offerings in the market. They’re also seeking out more broker advice than they were in February.
“However, it’s baffling why their existing lenders are not incentivising them to stay. The switching trend appears to be shaping up in other banking arenas as well, with the Payments Council reporting 1.1 million customers switching current accounts recently.”
Nearly a third (29%) of remortgagers increased the size of their loan, while just under one in four (22%) increased their loan amount by as much as £10,000. Two fifths (38%) of remortgagers also successfully reduced their monthly payments by £500.
Knee added: “With economic growth slowing down in March – almost half of what it was three months ago – it’s important to remember that we’re still on the path to economic recovery.
“We’re not there yet, but what we’re looking at now is a wiser, post-recession consumer shaped by almost a decade of austerity, which is something lenders need to consider in order to retain their customers.
“A gradual growth in the number of people remortgaging to access better rates is a promising sign that buyers are applying the same wisdom to their mortgages; however, there is still an element of complacency among those who expect competitive offers to last for a while yet.
“Although people are remortaging for the right reasons, they’re clearly not remortgaging enough.”