Remortgages Leapt By More Than A Third

A surge in remortgages after the rate rise

A new report has shown a big swell in remortgaging activity last December. Were you one of the canny bunch had the foresight to get a remortgage on a fixed rate ahead of potential further interest rate rises in 2018.

When the Bank of England increased the base rate by 0.25% in November 2017 many people decided to remortgage to a new deal. A new report by, LMS shows that the number of remortgages rose 41% year-on-year from 28,400 in December 2016 to 39,943 in December 2017.

Motivation to remortgage

Whilst the Bank of England kept the interest rates at 0.5% in February there were strong hints they will increase the base rate again soon. Bank of England Governor Mark Carney said two more base rate rises were likely by the end of 2020.

Analysts expect a base rate rise as soon as May and the research by LMS suggests that 82% of borrowers now expect an imminent rise.

Variable rate down & fixed rate up

Nick Chadbourne, chief executive of LMS, said: “With the base rate having risen for the first time in 10 years, borrowers have started looking for greater security.”

When the rate increased in November;

    • demand for 5-year fixed products rose, making up 46% of recent mortgages, double the 23% market share seen in December 2016.
    • demand for variable rate products fell to 2% of the remortgage market in December 2017 – a sharp drop from the 9% in December 2016 and a new low.

What should I do next?

If you are already on a fixed rate mortgage then the anticipated rate rise in May might not impact you. However if your current deal is coming to an end, its worth reviewing your mortgage and your current circumstances. You could save a good chunk of money in the long run by not falling on to a standard variable rate. One place to start is by talking to an independent mortgage advisor. We work with independent financial advisors who will discuss your options, explain the different lenders criteria and help you work out the best mortgage options for your circumstances.

Call our expert independent financial advisers now!

Call 020 3582 6091 or 0141 465 7632.
Open 7 days a week until 8pm weekdays.

Source – Mortgage Introducer