Intermediaries are largely proactive in encouraging customers to review mortgage options at term end, according to Paragon data.
In its latest Financial Adviser Confidence Tracking Index, Paragon interviewed 200 mortgage intermediaries to find nine out of 10 kept a record of customer maturity dates – allowing proactive remortgage discussions at the right time.
Paragon’s survey found 83 per cent of intermediaries proactively contact customers to discuss remortgage options as their end of term approaches – with half committed to ‘always’ doing so and one third ‘usually’ doing so.
When choosing between remortgaging with an alternative provider or a product switch with an existing lender, intermediaries said 43 per cent of customers choose the latter when their current mortgage matured.
When discussing switching to a higher rate, two thirds of intermediaries said they would "never" or "only rarely" recommend a product switch at a higher rate and one third would choose to do so in certain circumstances for the benefit of convenience.
John Heron, managing director of mortgages at Paragon, said the findings demonstrated the important role intermediaries play in encouraging competition and choice in the mortgage market in offering a proactive prompt to customers at the end of their current deal.
He said: "What is 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."
The Financial Conduct Authority is due to report its mortgage market study at the end of this year, in which it will address consumer ability to make effective choices when selecting a mortgage.
Dale Jannels, managing director at All Types of Mortgages, said that with the base bank rate recently rising and the uncertainty of Brexit on the horizon, there is no better time to be close to your customers.
He added: "What is more, with technology becoming more and more reliant in the day to day running of businesses, some systems, like OMS, will automatically ensure that product maturities are not missed.
"Systems can email the broker or clients way before the product end date to ensure the customer gets the best possible options available to them, and allowing the broker to relax in the knowledge that their technology will work for them."
rachel.addison@ft.com
