The Intermediary – June 2025 - Flipbook - Page 16
RESIDENTIAL
Opinion
Remortgage trends
reflect shift
towards stability
W
e are witnessing
a real moment
of change in the
UK remortgage
landscape. For
the first time
in over two years, more than half of
all borrowers selected 5-year fixedratemortgage products.
This signifies a shi away
from opportunism and toward
intentionality. Borrowers are
choosing long-term certainty, even
when economic forecasts point to
rate reductions in the not-too-distant
future. That decision speaks volumes
about where borrower sentiment
is heading.
Return of the 5-year fix
It’s a sign that borrowers are moving
away from relying on market shis
and instead prioritising financial
stability. They’re prioritising certainty
over speculation. That’s a big shi
from the rate-chasing behaviour that
defined much of the post-pandemic
remortgage market.
It’s also a strong signal of how
recent economic instability has
shaped consumer thinking. The past
few years have brought inflation
spikes, global energy shocks, and
household budget squeezes. Against
that backdrop, it’s no surprise that
homeowners are re-evaluating their
appetite for risk.
Even though base rate cuts are still
on the cards for 2025, many borrowers
seem to believe those cuts will be
slower or smaller than anticipated.
Rather than holding out in the hope
of beer rates, they’re opting to secure
what’s on offer now, especially as
many lenders are pricing 5-year deals
competitively to aract market share.
There’s another, more urgent
dynamic at play, too. A wave of
16
The Intermediary | June 2025
borrowers is now emerging from low,
sub-2% fixed deals agreed during the
pandemic. With those rates expiring,
the alternative is jumping to standard
variable rates (SVRs) that can be three
or four-times higher.
That kind of payment shock isn’t
something borrowers are willing to
accept lightly. Many are choosing to
remortgage ahead of time, locking in a
deal before their current term ends.
The result? We’re seeing a more
proactive, engaged borrower
base that’s focused on long-term
affordability and peace of mind.
At LMS, we’ve seen increased
activity in remortgage instructions
and completions as borrowers take
action earlier in the cycle. The
message is clear: consumers are
planning ahead, and they’re looking
for solutions that help them do so
with confidence.
The implications
What does this behavioural shi
mean for the market? First, it puts a
spotlight on the importance of clear,
flexible product design. Borrowers
don’t just want a low rate, they want
to understand what that rate means
for them now and down the line. They
want transparency, not complexity.
Lenders that can offer products that
support long-term financial resilience
and explain them in simple, relatable
terms will have the edge. That means
offering real clarity on repayment
expectations, exit fees, and how
products might respond to changes in
the base rate.
It also reinforces the value of
strong partnerships between lenders
and intermediaries. As the market
becomes more nuanced, borrowers are
turning to advisers not just for access
to deals, but for trusted guidance.
They need someone to help them
NICK CHADBOURNE
is CEO at LMS
navigate the options and align their
mortgage strategy with their broader
financial goals.
The broker’s role
Explaining the implications of a 5-year
fix versus a 2-year option, exploring
what overpayment flexibility might
look like, and helping clients stresstest different rate scenarios are all part
of delivering value.
With product proliferation only
likely to increase in a competitive
lending environment, tailored advice
will be a key differentiator. Borrowers
are more cautious, but they’re also
more engaged. That opens the door to
more meaningful, long-term adviserclient relationships.
Intentional borrowers
What we’re really seeing is a new
kind of borrower behaviour emerging
that’s cautious, measured, and futurefocused. That’s a healthy development.
It suggests that UK households are
becoming more financially resilient,
and more prepared to make decisions
that protect them against volatility.
For the wider market, it’s a sign
that the post-pandemic recalibration
is still very much underway. As more
borrowers come off low-rate deals,
we can expect remortgage activity to
stay strong into Q3 and beyond. The
appetite is there, but so is the demand
for clarity, guidance, and longterm value.
The takeaway is simple: the long
game is back. In an environment
shaped by uncertainty, borrowers are
choosing stability, and the market
must adapt to meet them there. ●
