The pace at which lifetime mortgage customers are switching lender for a better deal has slowed dramatically — falling 34% this year, later life mortgage broker Responsible Life can reveal.
Retirees switched 331 lifetime mortgages to new providers in the first quarter of 2021, compared with 498 in Q1 2020 according to latest figures obtained from the Financial Conduct Authority (FCA).
The pace of switching fell 28.9% in the 12 months to the end of March 2021, dropping from 1,824 to 1,297.
Responsible Life believes one likely explanation for the slowdown is that many borrowers seized the opportunity to switch when rates dropped to between 3% and 4%. This created a spike in activity driven by those who wanted to take advantage of lower rates while they lasted.
However, the pace at which homeowners are rebroking their lifetime mortgages has still risen 44% in two years, up from 230 in Q1 2019 just as the market started to see a big jump in remortgaging. Currently, around four in every 100 equity release customers are switching each year, out of more than 300,000 outstanding mortgages.