Mortgage intermediaries play an important role in encouraging customers to weigh their options before securing a better deal, according to Paragon.
Its ‘Financial Adviser Confidence Tracking (FACT) Index’ surveyed 200 mortgage intermediaries and found nine out of 10 keep a record of customer maturity dates, allowing them to proactively reach out to discuss remortgage options at the right time.
Half of intermediaries said they always contact customers as they approach the end of their current arrangement, compared with one third who said they usually do so.
Intermediaries assist customers to review a range of different options available to them, including switch products on offer from their existing lender and remortgage products available from alternative providers.
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.
What’s more, 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 under certain circumstances for convenience purposes.
The findings come in line with the Financial Conduct Authority (FCA) completing its current Mortgage Market Study – which looks at customers’ ability to make effective choices when selecting a mortgage – due to report at the end of 2018.
In fact, the FCA reported high levels of consumer engagement in the mortgage market in May, with over three quarters of customers switching to a new mortgage deal within six months of moving onto a reversion rate.
John Heron, managing director of mortgages at Paragon, commented: “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.”