Brokers lose out on £16m in commission fees a year by failing to quote clients on remortgages or product transfers, according to Paymentshield.

The insurer says these products acount for approximately 20% of all mortgage deals handled by advisers, which leads to around 208,600 approvals a year generating about £17m in fees.

But the firm says brokers actually net around £937,500 a year from remortgage fees, resulting in a £16m earnings blackhole.

This means advisers are only quoting on 5% to 6% of remortgages, according to annualised monthly mortgage approval figures dating back to January 2019, remortgage approval volumes, market research, and Paymentshield’s own indicative market data.

The insurer says brokers should move to close this shortfall, particularly as in the coming months large volumes of five-year fixed-rate mortgages are set to mature following historic changes to tax regulations for buy-to-let landlords.

In 2016, a stamp duty surcharge was introduced, adding an extra 3% to the cost of a purchase for buy-to-let and second home buyers in England and Northern Ireland.

And a year later the government began withdrawing mortgage tax relief for landlords in the higher rate tax bracket.

Paymentshield sales director James Watson says: “This year, we believe there’s even greater scope for advisers to use remortgage to both sustain and future-proof business – and therefore hopefully reduce the startling £16m commission blackhole.

“For example, we’re expecting a wave of renewals for landlords who signed up to five-year fixed mortgages after the government tightened regulations on buy-to-let activity.

“And, as a nation, since the past 18 months have dramatically reimagined our relationship with the home, we’ve seen home improvements skyrocket and with it the opportunity for quoting remo.”

Paymentshield hosts a virtual conference, Be GI: Stronger Together, on 14 September, which takes remortgage as a central theme.