We must help clients re-mortgage their Help to Buy deals
It appears, with a rate rise anticipated in August by many analysts, that this is year that Carney is expecting the British economy to be strong enough to weather another interest rate rise. For the majority of mortgage borrowers, rate rises mean borrowing costs go up. Swap rates have been rising and whilst not all lenders' product rates are linked directly to market swaps, rates influence all funding streams - retail and wholesale.
Recently, re-mortgage business has focussed on traditional, residential lower loan-to-value borrowers. In addition, product transfer business has grown strongly for many lenders as they seek to lock borrowers in for years to come. The new burgeoning market of Help-to-Buy re-mortgaging presents a new opportunity.
Perhaps understandably given the complexity of Help to Buy, there are too few lenders that offer re-mortgage products in this market. However, brokers and lenders who understand this market (and its borrowers) have a duty and a commercial reason to help confused borrowers navigate the options. Help to Buy is complicated in so far that the equity loan arrangements need to be considered in any refinancing. It is complex because unlike conventional mortgages the equity is beholden to another interested party - the government.
It's really important borrowers understand the complexity of re-mortgage Help-to-Buy and imperative that brokers and lenders in the market are well placed to offer the right advice.