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Broker satisfaction with lenders has increases to 82.7% despite COVID-19.

Broker satisfaction with mortgage lenders increased to 82.7% despite COVID-19 with Halifax being the UK’s highest-rated bank and Metro Bank its the lowest rated, according to the fourth edition of the Mortgage Lender Benchmark.

The six-monthly assessment of the service and propositions offered by lenders found that overall broker satisfaction with the lenders they do business with was up from 81.1% in H2 2019 (December).

Across all case types, satisfaction with product transfers has soared to 86.2%, up from 83.2% in H2 2019. And while banks and specialist lenders have seen the greatest increase in overall satisfaction, building societies remain the highest rated sector, and four of the five highest rated buy to let lenders are now building societies.

Broker satisfaction across lifetime lenders is largely flat, although brokers reported finding it harder to determine the maximum loan amount and product eligibility across this group of lenders.

The ease of determining product eligibility for lifetime lenders fell to 77.7%, down from 82.5% in H2 2019.

Michael Fotis, managing director of Smart Money People said, “Overall brokers are more satisfied with the performance of relationship managers, customer service and the speed offered by lenders in particular.

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“And while broker satisfaction with mortgage lenders has jumped to the highest levels seen since our tracking commenced in December 2018, COVID-19 had an impact on a number of themes.

“Brokers talked more negatively about product range, communication and the clarity of criteria in this edition.”

Halifax remains the UK’s highest rated bank with ease of application and speed remaining key strengths. Godiva Mortgages, Coventry Building Society’s buy to let brand sees its overall satisfaction increase by 11%, and is now the highest rated lender in its category.

more 2 life remains the UK’s highest rated lifetime lender and is some 9% above its nearest competitor. Metro Bank is the UK’s poorest rated bank with underwriting and a lack of flexibility reported by brokers as the biggest pain points.

The NPS of lenders, a measure of loyalty, ranges from +73.1 to -40.0, with the average across all lenders increasing to +30.8.

This research is carried out by Smart Money People.

By Ryan Fowler

Source: Mortgage Introducer

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Lenders pledge ongoing support for those affected by Covid

Mortgage lenders are committed to supporting borrowers who are reaching the end of a three-month payment holiday to choose the next steps that best suit their needs, according to UK Finance.

This comes after HM Treasury confirmed last week (May 22) that mortgage customers, who were struggling to pay due to the coronavirus, can extend their payment holiday for an additional three months or begin to make reduced payments.

Figures from UK Finance showed that an equivalent of one in six mortgages are currently covered by a payment holiday, with more than 1.82m payment holidays having been issued as of May 20.

The industry body said it was “important that customers receive the support that is right for them” and for those who had already taken a payment holiday, an extension “may be appropriate in some circumstances”.

It encouraged borrowers who are concerned about their ability to pay to contact their lender and consider the “full set of options available to them”.

These include reduced payments, a move to interest-only payments for a period, extending the term of the mortgage to reduce payments, taking a payment holiday if the customer has not already done so or a further extension of the payment holiday.

Stephen Jones, UK Finance CEO, said: “Mortgage lenders are committed to providing those borrowers nearing the end of their three-month payment holiday with help and flexibility in choosing the next steps which best suit their needs.

“The industry looks forward to regulatory guidance being finalised swiftly to ensure both borrowers and lenders can plan over the coming weeks.

“Meanwhile those borrowers who have already taken a mortgage payment holiday and can afford to make payments are encouraged to do so, as this will reduce the level of their repayments in the long run.”

In response, Vim Maru, retail director at Lloyds Banking Group, said: “We are already proactively contacting our customers who will be reaching the end of their repayment holidays to support them in restarting their payments.

“For those who may continue to be financially impacted, we will offer a range of support based on their current financial circumstances.”

But Dominik Lipnicki, director at Your Mortgage Decisions, said he would welcome a “more uniformed approach from lenders when it comes to the ease of application [of a payment holiday] and how these borrowers are looked at in the future when remortgaging or buying a new home”.

Research from YouGov for Nationwide found that 21 per cent of homeowners in April were worried about not being able to keep up with mortgage payments, and 14 per cent feared losing their home.

Lenders have also committed to continue suspending involuntary repossessions for residential and buy-to-let customers until October 31, as set out in the Financial Conduct Authority’s draft guidance for lenders published last week (May 22).

On the day the FCA published its draft guidance, Nationwide pledged that none of its mortgage customers, who fell into arrears as a result of Covid-19, would see their home repossessed until the end of May 2021, if they worked with the provider to “get their finances back on track”.

Joe Garner, chief executive at Nationwide, said: “As a mutual, founded to help people into a home of their own, this is what building societies have always been about. We hope this additional support will provide extra flexibility to those who most need it, to help get them back on track.”

Mr Lipnicki added: “The fact that repossessions are on hold is a very welcome relief for affected borrowers and I am sure that more flexibility will need to be applied even after October 31”.

By Chloe Cheung

Source: FT Adviser

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Rise in mortgage products ’cause for optimism’

The number of mortgage products grew by 5.9 per cent in the past week in a sign the market is starting to recuperate, according to technology provider Mortgage Brain.

The number of products available last week stood at 8,044, marking the second consecutive week the number had risen, and up by 488 from the previous week.

The increase was mostly due to the remortgage sector, where product numbers went up by 5.4 per cent, while home mover products increased by 2 per cent, and buy-to-let products fell by 1.9 per cent.

When compared to pre-pandemic levels, the number of mortgage products is still 6,630 – or 45 per cent – lower than the nine week average to March 16, however.

According to Mortgage Brain the latest increase in numbers reflected lenders returning to the market, increasing their LTVs and relaxing some of their criteria.

Last week Nationwide resumed lending up to 85 per cent to new customers. Specialist lender Hodge followed and lifted restrictions on its mortgages, after announcing interim changes to its lending criteria last month.

Mark Lofthouse, CEO of Mortgage Brain, said the rise in product numbers in the past two weeks was “cause for cautious optimism”.

Describing the recent figures as “encouraging”, Mr Lofthouse added that “we could be at the end of the dramatic week on week reductions”.

Kevin Dunn, director at Furnley House, added: “Last week we thankfully saw the return to the market of some higher loan to value deals from some of the bigger lenders. Hopefully this will have a ripple effect to give other lenders the confidence to return more products to the market too.

“A higher increase in remortgage products makes sense, as often these are easier to complete without having to have a physical valuation.

“There are definitely some green shoots to suggest the market is slowly coming back.”

By Chloe Cheung

Source: FT Adviser

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One in nine UK mortgages now subject to a payment holiday

The number of mortgage payment holidays in place more than tripled in the two weeks between March 25 and April 8, UK Finance said.

More than 1.2 million mortgage payment holidays have been provided to home owners whose finances have been hit by coronavirus, according to a trade association.

This equates to around one in nine (11.2%) mortgages across the UK now being subject to a payment holiday, UK Finance said.

For the average mortgage holder, the payment holiday amounts to £260 per month of suspended interest payments.

For a mortgage where chunks of the capital (the amount borrowed) and interest are normally being repaid, the average payment holiday equates to around £775 of deferred payments each month.

Lenders announced on March 17 that they would support customers facing financial difficulties due to the Covid-19 crisis.

People who are struggling to make their payments, perhaps because they have had a pay cut or their work has temporarily stopped due to Covid-19, can request a mortgage payment holiday of up to three months.

Payment holidays are available to customers who are up-to-date on their mortgage payments. People taking up this option will still owe the money and interest will still accrue.

Home owners applying for a mortgage payment holiday will need to self-certify that their income has been either directly or indirectly impacted by coronavirus.

UK Finance has said firms will make every effort to ensure payment holidays do not negatively impact on credit files.

The number of mortgage payment holidays in place more than tripled in the two weeks between March 25 and April 8, growing from 392,130 to 1,240,680. This is an increase of nearly 850,000 or an average of around 61,000 payment holidays being granted by lenders per day.

Stephen Jones, UK Finance chief executive, said: “Mortgage lenders have been working tirelessly to help home owners get through this challenging period. The industry has pulled out all the stops in recent weeks to give an unprecedented number of customers a payment holiday, and we stand ready to help more over the coming months.

“We understand that the current crisis is having a significant impact on household finances for people across the country. Lenders have a number of options available to help, and payment holidays aren’t always the right solution for everyone. We would therefore encourage any mortgage customers concerned about their financial situation to check with their lender so they can find out more information on the support available and how to apply.”

Robin Fieth, chief executive of the Building Societies Association (BSA), said: “We know that this is a difficult time for many home owners with a mortgage, and building society staff have been working hard to offer individuals the right solution. For almost quarter of a million so far, that has been a three-month payment holiday offering much needed breathing space to families whose household income is under severe pressure during the current crisis.”

UK Finance said telephone lines remain extremely busy so customers who are concerned about making their mortgage payments are advised to look at their lender’s website in the first instance, which will include the latest information on the support available.

Many lenders are offering customers the option to apply for a mortgage payment holiday through an online form on their website.

Lenders are also urging mortgage holders not to cancel their direct debits before a payment holiday has been agreed, as this will be counted as a missed payment and could impact their credit file.

Source: Express & Star

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1.24 million mortgage borrowers given payment holidays by lenders

More than 1.2 million mortgage payment holidays have been granted to households whose finances have been impacted by Covid-19, UK Finance has revealed.

This means that one in nine residential and buy-to-let mortgages (11.2%) in the UK are now subject to a payment holiday.

For the average borrower, the payment holiday amounts to £260 per month of suspended interest payments. This is calculated using the average interest rate of 2.37% on an average loan size of £132,128 in the UK, as of 31 December 2019.

On 17 March, the Government gave the go ahead for mortgage lenders to allow payment holidays and the number has more than tripled in the two weeks between 25 March and 8 April, growing from 392,130 to 1,240,680.

This is an increase of nearly 850,000 or an average of around 61,000 payment holidays being granted by lenders each day.

According to the Building Societies Association, a quarter of a million of the total figure of 1.24 million is mortgage payment holidays granted by building societies.

The UK Finance figures are grossed up from a representative sample and could be revised slightly as firms identify double-counting and other anomalies in previous daily totals.

Stephen Jones, UK Finance CEO, said: “Mortgage lenders have been working tirelessly to help homeowners get through this challenging period. The industry has pulled out all the stops in recent weeks to give an unprecedented number of customers a payment holiday, and we stand ready to help more over the coming months.”

Robin Fieth, Building Societies Association CEO, said: “We know that this is a difficult time for many homeowners with a mortgage and building society staff have been working hard to offer individuals the right solution.

“For almost quarter of a million so far, that has been a three month payment holiday offering a much needed breathing space to families whose household income is under severe pressure during the current crisis.”

Telephone lines remain extremely busy and lenders have been updating their websites with the latest information on the support available to answer customers’ queries. Many lenders are offering customers the option to apply for a mortgage payment holiday through an online form on their website.

Lenders are also urging mortgage holders not to cancel their direct debits before a payment holiday has been agreed, as this will be counted as a missed payment and could impact their credit file.

By Joanne Atkin

Source: Mortgage Finance Gazette

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Mortgage lenders temporarily restrict products on offer

Mortgage lenders are temporarily restricting the products on offer as the impact of coronavirus hits the market.

Borrowers who have lower deposits saved may find themselves particularly affected.

Lloyds Banking Group has temporarily withdrawn new mortgage and re-mortgage products with a loan-to-value (LTV) ratio of over 60% across its broker channels – Halifax Intermediaries, Scottish Widows Bank and BM Solutions.

It said customers can still apply for a mortgage directly online as normal with Halifax and Lloyds Bank.

Product transfer and further advance products remain unchanged and customers with existing mortgage offers have been granted an additional three months to complete their home purchase or re-mortgage at the agreed mortgage rate.

Regrettably it has been necessary to withdraw a further selection of products across our residential and buy-to-let ranges.

Barclays

Meanwhile, Barclays said it has had to withdraw some products, although it said a number of lower deposit deals remain available.

A statement from Barclays said: “Regrettably it has been necessary to withdraw a further selection of products across our residential and buy-to-let ranges.

“This action has been taken to support us in managing the flow of applications into our UK underwriting teams following the closure of our key offshore sites.

“At the same time it enables our colleagues to provide greater help to those customers requesting mortgage payment holiday arrangements for financial support.”

The Barclays statement added: “We expect to launch a fresh range of residential and buy-to-let products shortly and we apologise for any inconvenience this causes in the interim.”

Mortgage lenders have already pledged to offer three-month payment holidays to borrowers suffering financial hardship due to coronavirus.

A report released by Zoopla on Thursday predicts that house sales volumes could plunge by as much as 60% over the next three months, compared with the second quarter of 2019, as the market reacts to the impact of Covid-19.

But, while property sales are expected to see a sharp drop-off, Zoopla said house prices are not expected to change materially in the next month or two.

Meanwhile, online buy-to-let mortgage broker Property Master warned that landlords generally may face a tougher struggle to get mortgages.

Angus Stewart, Property Master’s chief executive, said: “Landlords are finding that their borrowing options are being drastically reduced.”

Source: Border Telegraph

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Home repossessions suspended for three months

Mortgage lenders will not repossess residential and buy-to-let properties from today for the next three months for borrowers affected by the coronavirus.

They are also suspending all repossession orders currently active, however, formal demand notices telling borrowers how much they owe will continue to be issued but not acted upon for 90 days.

A joint statement from trade bodies UK Finance and the Building Societies Association (BSA) set out how the operation to pause possessions will work:

  • Lenders will suspend all possession orders
  • Lenders will not commence any court action, including putting the case to court or instructing on matters
  • Lenders are able to issue a formal demand, so that the customer is aware of the money they owe and are informed that the case will eventually go to possession proceedings
  • This letter is valid for eight weeks, but firms will agree not to take any further steps until the end of the 90-day period
  • There are exceptions for empty properties or where the customer wants the possession to go ahead
  • In buy-to-let, lenders would still use a Receiver of Rent where appropriate but would not move to possession if the tenant could not pay

Worrying time

The easing of possessions is in addition to the flexibility announced for affected residential borrowers and buy-to-let landlords outlined over the previous two days.

This includes up to three months mortgage payment holiday and other flexibility from lenders.

Robin Fieth, chief executive of the Building Societies Association (BSA) said: “Building societies are acutely aware that this is a worrying time for those with a mortgage or who pay rent as both typically account for a significant proportion of household expenditure.

“Now is a time for lenders to be flexible. The steps being taken by the industry today will offer some breathing space for those affected by the Covid-19 situation whether directly or indirectly.

“The best first step advice remains to get in touch with your lender or landlord.”

UK Finance CEO, Stephen Jones, added: “The industry wants to reassure customers that they will not have their homes repossessed at this difficult time and therefore, these measures will start from 19 March.”

Written by: Owain Thomas

Source: Your Money

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Mortgage payment holiday: how the three-month coronavirus payment break will work – and what happens to renters

Mortgage payers who are facing financial difficulty due to the current coronavirus pandemic are to be offered payment holidays of up to three months, the government has announced.

Chancellor Rishi Sunak made the announcement on Tuesday 17 March as part of emergency measures designed to protect households amid the virus outbreak.

Three month reprieve on payments

A number of mortgage lenders have already announced repayment holidays for borrowers affected by coronavirus, but the government’s announcement on Tuesday (17 Mar) now means all lenders will have to honour the three month time frame.

The measure comes in an effort to ease the financial burden for households, meaning borrowers will not have to pay anything towards mortgage costs “while they get back on their feet”, the Chancellor said.

The news comes after the Chancellor revealed the government is to offer £300 billion of government-backed loans to support businesses through the coronavirus pandemic.

The loans are equivalent to 15 per cent of GDP and include schemes for businesses in hospitality, retail and leisure sectors, such as airlines and airports.

Stephen Jones, UK Finance chief executive, said: “Monthly mortgage payments tend to be the largest outgoing for the vast majority of households and lenders are keen to reassure homeowners that the industry is working hard to put measures in place to support them during these uncertain times.

“Customers who are concerned about their current financial situation should get in touch with their lender at the earliest possible opportunity to discuss if this is a suitable option for them.”

How will the mortgage holiday work?

In response to the government’s announcement, UK Finance, which represents financial firms, has outlined how the mortgage payment holiday will work.

The mortgage repayment is deferred for a period. The monthly payment changes to zero, and interest accrues for the period.

Where repayments are deferred for a time, the borrower will need to make up these repayments in the future, which could be over the remaining term.

Will everyone get an automatic three-month payment holiday?

Firms will help customers in the best way possible for the individual, so an automatic payment holiday may not always be the most suitable approach and may not be required by everyone.

Firms will be speaking to credit reference agencies to ensure consistent treatment of those customers to whom a repayment holiday is made available.

What if I don’t own my property but I rent instead?

The Prime Minister has said that tenants will be protected from eviction during the coronavirus outbreak.

With quarantine measures and illness likely to force many people out of work in the coming weeks, new legislation is to be introduced to prevent this from leaving those unable to pay their rent homeless.

The emergency legislation will prevent landlords from beginning the proceedings to evict tenants for at least the next three months. This applies to both renters in social and private accommodation.“As a result of these measures, no renters in private or social accommodation needs to be concerned about the threat of eviction” the statement says.

The legislation is expected to pass through Westminster and be consented to by Holyrood within the coming week.

UK Finance has advised renters to contact their landlord or managing agent if they have problems paying your rent.

If you are a landlord and your tenants are unable to pay their rent you should contact your lender as soon as possible to discuss the options that may be open to you.

How do I apply for a payment holiday?

Lenders are offering customers who are up-to-date with their mortgage payments, and impacted by coronavirus, the ability to self-certify if they need help.

Under usual circumstances, the lender would have to assess the customer’s finances and consider what options may be the most suitable.

This is being waived to allow firms to implement a more straightforward process in an otherwise stressful time.

It is important that customers who believe they may be impacted, either directly or indirectly, contact their lender at the earliest possible opportunity to discuss if the payment holiday is a suitable option for them.

Is everyone eligible for a payment holiday?

The offer of a payment holiday can be made available to customers not already in arrears and up-to-date with payments.

Under Financial Conduct Authority (FCA) rules, lenders must ensure that any forbearance that is offered will enable borrowers to recover through full repayment of arrears.

Lenders must also minimise the long-term impact of arrears and ensure the mortgage remains affordable and sustainable.

Overall, forbearance needs to minimise the risk of repossession. This is why payment holidays are generally short-term.

For customers who are already in arrears or in financial difficulty, lenders will consider the full range of options ordinarily available to customers under existing rules.

What about people who may need support longer term?

While the payment holiday is in effect, the capital sum of the loan remains as is, while the interest that would have been paid accrues.

At the end of the payment holiday period, the rules will re-apply. Lenders will get in touch with customers to assess their circumstances, including income and expenditure, and come to an arrangement with the customer to enable recovery through the full repayment of the arrears.

If the customer is in financial difficulty, lenders will come to an arrangement to recover the customer into a sustainable position on the mortgage. Any arrangements will aim to minimise the risk of repossession.

What if I’m already in arrears?

You should continue to speak to your lender. Lenders will review existing arrangements if there is a change in circumstances.

By Claire Schofield

Source: Edinburgh News

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Coronavirus and mortgage payment holidays – what help can home owners get?

UK Finance has outlined how home owners could be helped with mortgage payment holidays of up to three months.

Mortgage lenders have set out how they will offer payment holidays of up to three months for borrowers who are in financial difficulty due to coronavirus.

Stephen Jones, UK Finance chief executive, said: “Monthly mortgage payments tend to be the largest outgoing for the vast majority of households and lenders are keen to reassure homeowners that the industry is working hard to put measures in place to support them during these uncertain times.

“Customers who are concerned about their current financial situation should get in touch with their lender at the earliest possible opportunity to discuss if this is a suitable option for them.”

Here are some answers from UK Finance, which represents financial firms, to general questions that customers may have about their potential options:

– How do ‘payment holidays’ work?

The mortgage repayment is deferred for a period. The monthly payment changes to zero, and interest accrues for the period. This may be particularly appropriate where there is a temporary shortfall of income.

But it is not a solution where, because of a permanent reduction in income, a borrower is unable to afford anywhere near the full mortgage repayments and there is little prospect of an improvement in the situation in the foreseeable future.

Where repayments are deferred for a time, the borrower will need to make up these repayments in the future, which could be over the remaining term.

– Will all customers receive an automatic three-month payment holiday?

Firms will help customers in the best way for the individual, so an automatic payment holiday may not always be the most suitable approach and may not be required by all customers.

Firms will be speaking to credit reference agencies to ensure consistent treatment of those customers to whom a repayment holiday is made available.

– How do I apply for a payment holiday?

Lenders are offering customers who are up-to-date with their mortgage payments and impacted by coronavirus the ability to self-certify if they need help.

Under usual circumstances, the lender would have to assess the customer’s finances and consider what forbearance options may be the most suitable.

This is being waived to allow firms to implement a more straightforward process in an otherwise stressful time.

It is important that customers who believe they may be impacted, either directly or indirectly, contact their lender at the earliest possible opportunity to discuss if the payment holiday is a suitable option for them.

– Are all customers eligible for a payment holiday?

This is one of several options. The offer of a payment holiday can be made available to customers not already in arrears and up-to-date with payments.

Under Financial Conduct Authority (FCA) rules, lenders must ensure that any forbearance offered enables recovery through full repayment of arrears, minimises the long-term impact of arrears, and that the mortgage remains affordable and sustainable. Overall, forbearance needs to minimise the risk of repossession.

This is why payment holidays are generally short-term. For customers who are already in arrears or in financial difficulty, lenders will consider the full range of options ordinarily available to customers under existing rules.

– What about customers who may need support longer term?

While the payment holiday is in effect, the capital sum of the loan remains as is, while the interest that would have been paid accrues.

At the end of the payment holiday period, the rules will re-apply. Lenders will get in touch with customers to assess their circumstances, including income and expenditure, and come to an arrangement with the customer to enable recovery through the full repayment of the arrears.

If the customer is in financial difficulty, lenders will come to an arrangement to recover the customer into a sustainable position on the mortgage. Any arrangements will aim to minimise the risk of repossession.

– How will a payment holiday affect my credit score?

Lenders have different approaches for reporting to credit reference agencies. Arrears that are accrued may be reported to the credit reference agency.

Firms will make efforts to ensure that forbearance offered under these circumstances will not result in an adverse impact on the customer’s credit score.

 What if I don’t own my property but rent instead?

Contact your landlord or managing agent if you have problems paying your rent. If you are a landlord and your tenants are unable to pay their rent you should contact your lender as soon as possible to discuss the options that may be open to you.

– What if I’m already in arrears?

You should continue to speak to your lender. Lenders will review existing arrangements if there is a change in circumstances.

Source: Express and Star

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‘Mortgage lenders could pull out of the market’

Niche Advice director Payam Azadi is concerned that the economic shock caused by coronavirus could force some lenders out of the market.

Azadi is concerned that non-bank lenders and specialist players could struggle with their funding lines in the weeks and months ahead.

The London broker said: “A lot of the lenders that rely on securitisations and the money markets are going to find it hard.

“Will these dry up? We’ve seen a battering of the stock market.

“The more dynamic and entrepreneurial businesses are under pressure because of the way they are funded.

“Institutions like big banks will do alright because they are backed up, well-funded and have strong balance sheets – they will weather the storm and see competition diminish.”

Azadi compared the situation to the outbreak of the global financial crisis of 2008, when some lenders reliant on securitisations went bust and exited the market because they couldn’t access their funds.

Azadi has seen many of his clients put proposed deals on hold due to the virus.

He is seeing a lot of enquiries from people looking to remortgage or consolidate debt – with measures like switching from a repayment mortgage to interest-only – to ensure they have a financial cushion in these difficult times.

However some landlords are looking at the situation as an opportunity to add to their portfolios, by purchasing a property at a competitive price.

Another broker, Aaron Strutt, product and communications manager at Trinity Financial Group, said he is continuing to help those who want to refinance.

He said: “While the main priority for people is their health during these difficult times it is important to reduce costs if possible.

“Mortgages are a big expense so if borrowers are about to switch to an expensive standard variable rate they should take action and swap to a better deal.

“We had a very busy start to the year and the market has slowed but we are still taking new enquires and will be helping our clients to remortgage.”

Despite both brokers speaking positively about borrowers wishing to refinance, they expressed disappointment that fixed rated mortgages haven’t cheapened after the Bank of England cut the base rate by 0.50% to 0.25% last week.

They added that some mortgage lenders are pulling tracker rates rather than reducing them.

Saffron Building Society pulled its buy-to-let range yesterday, though the lender indicated that it would re-enter the market later in the year.

BY RYAN BEMBRIDGE

Source: Property Wire