02 October 2022

To remortgage, or not to remortgage, that is the question

By Emma Graham, Business Development Director, Hodge Bank

Things that used to scare me – horror films, obnoxiously large spiders and the fear The Handmaid’s Tale was less a dystopian drama series and more a foreboding sign of things to come. Things that scare me now – filling my car with petrol, opening post from my energy provider and well, still the Handmaid’s Tale thing. Hodge’s business development director, Emma Graham, explains how remortgaging could provide a lifeline during a frosty financial winter.

What I’m trying to say is, for a lot of people, the financial crisis is making some of those everyday things a lot more fretful than they used to be. So when it comes to the much bigger things, like life events, family celebrations or carrying out repairs on the roof above people’s heads there’s real concern about how on Earth they’ll pay for them.

Hodge’s Cost of Living Whitepaper [link to https://hodgebank.co.uk/intermediaries/articles/cost-of-living-whitepaper/] found 80% of consumers have no confidence in their finances, yet the same paper found 21% would still look to release equity to carry out home improvements.

This is where I think there could be a real opportunity for lenders and intermediaries alike. According to CACI, there are £254bn worth of mortgages set to mature during 2022 with October and December being peak maturity months. While for us at Hodge we’ve seen 61% of new business during 2022 being on a remortgage basis with our 50+ mortgage being the most popular choice for customers.

We’ve seen new trends in reasons for borrowing throughout the pandemic and home improvements remain a priority as many look to change their surroundings to suit their new normal. I think we can naturally expect to see a rise in debt consolidation as the cost of living crisis really hits and people look for ways to better manage their money.

There’s also a growing need for like-for-like remortgages, interest-only customers who don’t want to downsize, borrowers who want a better rate or those on a variable rate who are after a fixed option. At Hodge we consider up to six times income on like-for-like so this may also provide an out for mortgage prisoners unable to remortgage due to current affordability criteria.

I’d say that’s pretty clear evidence that the right mortgage could open up a whole world of possibilities for your customers.

Understandably, customers are choosing to leave their savings and investments where they are thanks to strong interest rates, which inevitably makes remortgaging and capital raising for weddings, university fees, gifting deposits and home improvements a more attractive option.

And so we come to the question posed, to remortgage or not to remortgage? For many it could be a resounding yes, remortgaging really could help change their lives for the better in the moments that matter.

Why is Hodge different?

  • Our over 50s mortgages have been designed with today’s customer in mind, a great alternative to traditional equity release we consider earned income, both employed and self-employed, up to a maximum age of 80
  • We look at pre and post retirement income, there’s no upper age limit if the mortgage is affordable on pension income
  • We can lend up to six times income on a like for like remortgage and we offer day 1 remortgages
  • We lend from age 50 with a maximum term of 41 years for 50+ (with no end date for IO or RIO)
  • We only need one client to be aged 50, we can look at a second applicant under 50.

We also offer 10% overpayments plus our early repayment promise, meaning your clients can sell up and repay from the proceeds without early repayment charges for added peace of mind.

Help us change the dialogue around later life, so we as lenders and brokers can meet the needs of todays over 50s borrower.

Got a case with a story? Need to talk to experts? Get in touch today, at Hodge, we’re always working with you to provide mortgages as unique as your clients are.

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