Brokers say remortgages will dominate market this year
A survey of brokers shows that most of their business will come from property owners remortgaging.
Property owners seeking to remortgage will be the main source of new business in 2023, brokers believe.
New research reveals that most brokers don’t see homebuyers looking for new mortgages as their most common customers this year.
A survey of over 350 mortgage brokers by Paragon Bank found that 78% believe that remortgaging will be the strongest ‘driver’ of business, followed by buy-to-let remortgaging, cited by 51%.
A third of brokers said interest-only remortgages would be a strong contributor of business during the year as borrowers adjust to a higher interest rate environment.
Meanwhile, later-life lending and adverse credit mortgages were highlighted by 29% and 28% of brokers respectively as drivers of business.
Less convinced
Brokers were less convinced about the sales market in 2023. Less than a quarter (24%) believed home movers would be a significant contributor to business, falling to 23% for first-time buyers and 18% for buy-to-let purchases.
Brokers were split on whether borrowers would opt for the certainty of a fixed-rate mortgage or cheaper variable options.
Just under half (49%) believed that five-year fixed-rate mortgages would be the most popular product, with 47% stating base rate trackers or variable products with no early redemption charges would drive business. Meanwhile, 44% suggested that borrowers would want a two-year fixed mortgage.
“Many borrowers are due to come off two or five-year fixed-rates”
Richard Rowntree, managing director of mortgages at Paragon Bank, says: “After strong sales markets since the introduction of the Stamp Duty holiday in 2020, brokers now believe the dial will shift and remortgaging will dominate business.
“In the owner-occupied market, many borrowers are due to come off two or five-year fixed-rates, whilst the buy-to-let market saw a significant amount of five-year business written in 2018 due to mature.”
