What do falling rates mean for advisors?

February 4, 2024 by Alan

Mortgage Advisors

This year has seen a raft of rate cuts across the mortgage industry, leading many insiders to talk of a ‘rates war’ among lenders. Unsurprisingly, this is bringing about increases in mortgage lending, but what does the improving outlook mean for advisors?

One likely result is that there is likely to be more people interested in remortgaging. This is already starting to happen, as there was a rise of 13% in the net number of remortgages approved towards the end of 2023. This is set to be further fuelled by the fact that more than 1.5 million people’s fixed-rate deals will come to an end during the next 12 months, according to figures from the Financial Conduct Authority.

The cuts to rates that are being seen from lenders across the industry means that those with CeMAP training will have more options when it comes to finding a better deal for their clients. Rates may not return to the lows of pre-September 2022, but these will be less difficult for borrowers to cope with now, given other living costs.

Mortgage holders will be most likely to look for either switches or product transfers, depending on their circumstances. Advisors will need to make sure that their clients are candid about any financial challenges they are facing, so that the right product can be found for them.

This all means that this year could see advisors looking to consolidate business relationships with existing clients on fixed-rate and tracker mortgages just as much as seeking out new income sources.