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Mortgage repricing has reached 'unprecedented' levels

 

The pace of mortgage product repricing has reached "unprecedented" levels, a mortgage specialist has warned.

Speaking on the latest Fireside Chat, L&C Mortgage's David Hollingworth, associated director of communications, told FTAdviser intern Sophia Massam that the trend of lenders starting to suspend mortgage ranges has "started to gain momentum".

"This rapid pace of change - the number of withdrawals and repricing - has reached unprecedented levels.

"Our team has had to contend with more than 10,000 new product launches in July alone, so that goes to show this is something that does not seem to show any signs of slowing."

He commended advisers for "doing their absolute utmost" to get customers the rates before these are pulled, but acknowledged this rush of business has presented lenders with "service issues".

Hollingworth also said people should not be complacent about rate rises.

He said many people had already made some provision for their variable rates rising, or were enjoying "some degree of protection" thanks to having fixed their mortgage.

"The key thing is that mortgage rates have been rising rapidly since last year so borrowers have been adjusting to the cost that they have to pay on their mortgage", he said.

But he said things have been moving so quickly that people need to start thinking about what happens when the fix ends, while those on variable rates may see their monthly bills rise more quickly than they had perhaps anticipated.

He said: "Borrowers may be forgiven for not having kept up with the [Bank of England's rate changes] but they will need to watch out for it in the coming months.

"We have seen people starting to shop around with a view to securing a deal now with a view to protecting themselves against rate rises to come."

To watch the full interview, click on the image above.