Twice as many borrowers choose existing lender over switching elsewhere
Almost 1.2 million people took a product transfer with their existing lender in 2018 worth £158.7bn of lending activity, according to the latest figures released by UK Finance.
When combined with the UK Finance gross lending total of £267bn in 2018, this puts the overall mortgage market at approximately £426bn last year.
The number of product transfers completed was more than double that of remortgages with the value also worth just under twice as much.
Of the total number of product transfers in 2018, 624,900 transfers, worth £85.7bn, were conducted on an advised basis and 564,300 transfers, worth £73bn, were execution-only.
Almost one in five of the mortgage population switched product or remortgaged in 2018, representing in total over 1.6 million borrowers, the data showed.
In the fourth quarter of 2018, around 331,500 homeowners switched product with their existing provider worth about £46.1bn of mortgage debt.
Of the total number of product transfers in Q4 of 2018, 176,700 transfers, worth £25.2bn, were conducted on an advised basis and 154,900 transfers, worth £20.9bn, were execution-only.
Twice as many switches as remortgages
Jonathan Harris, director of mortgage broker Anderson Harris, said more than twice as many borrowers chose to stick with their current lender last year and move onto another mortgage with them when their existing deal ended rather than switch to a new provider.
He added: “With many lenders offering competitive rates on product transfers, and being more pro-active about getting in touch with customers to encourage them to switch, many borrowers are getting a good deal by sticking with their existing lender.
“But it is always worth checking whether there is a better option out there, as it is not always the case that product transfers are the best solution. With mortgage payments accounting for so much of people’s monthly outgoings, it’s important not to pay more than you absolutely have to.”
Borrowers taking advantage of competitive marketplace
Jackie Bennett, director of mortgages at UK Finance, said these figures showed a high level of customer engagement, as borrowers continue to take advantage of a competitive marketplace to switch to a product that best suits their needs.
She added: “For those who need help in finding the right product, support is widely available through both direct channels and intermediaries, with more than half of borrowers taking advice for their new deal.
“Add that to just under 480,000 people who remortgaged in 2018, worth £85bn, and this means that almost one in five of the mortgage population switched to a new deal in 2018.”