Remortgaging has been enjoying a welcome boost in recent months, despite September's slight dip, with many homeowners capitalising on record low mortgage rates to boost their finances. Given the amount that can be saved, it's a great time to get involved.
The figures, from LMS, show that the value of remortgage lending rose by a whopping 23% in October to total £6.8bn, up from £5.5bn in September, making it the highest figure seen since November 2008. It also represents an impressive annual increase of 19%, up from £5.7bn in October 2015. The number of remortgage transactions is also on a definite incline, with the total for the month (39,547) marking a 26% increase from September (31,500), and being the highest seen since January 2009.
Overall, remortgaging accounted for 33% of total gross lending in October, the highest percentage since April, so people are clearly flocking to the market. As expected, LMS says that the remortgaging rush has been driven by homeowners looking to lock into low rates, fuelled by concerns that rates could rise next year, not to mention the ongoing political and economic uncertainty from the Brexit vote. And that's before we even get to the financial benefits…
Being able to lock into a low rate mortgage not only means you have the potential to reduce your monthly repayments by a considerable amount – giving you a great income boost throughout the year – but it also means you could increase your loan amount and therefore release equity from your home for a lump sum cash injection, and at a very reasonable rate.
Indeed, the figures show that the average loan amount rose by 4% on a monthly basis, up from £164,394 in September to £171,154 in October, and by 6% year-on-year (up from £162,176 in October 2015). The average amount released through remortgaging stood at £27,004, which despite marking a slight drop on both a monthly and annual basis, is still an impressive sum!
"The remortgage market has enjoyed a revival since September's post-Brexit low," commented Andy Knee, chief executive of LMS, "[with] homeowners remortgaging at levels that have not been seen for almost eight years, when the recession hit.
"There are several key driving forces behind this revival. Some of this is seasonal. In the run-up to Christmas, families are looking to tighten the purse strings, reduce their monthly bills and prepare for the festivities. Record-low rates are providing the perfect opportunity for homeowners to remortgage and secure monthly savings on their mortgage bills.
"Another factor is that homeowners are cautious of what the future may hold. Families are seeking long-term security, [and] some homeowners are locking in low rates and fixing their monthly repayments. But perhaps the most important factor is the current anticipation of a rate rise in 2017. LMS found that 23% of remortgagors in October expect a rate rise to occur in the New Year, which has convinced some homeowners that now is the time remortgage."
Whatever your reason for remortgaging, it's clear that now could be a great time to do so. Rates are at record lows, and if you lock in to a low cost fixed rate remortgage deal now, you can secure your repayments for the long term and avoid the possibility of being hit with a rate rise in the near future. The savings could be marked, too, so check out the top remortgage deals to see how low your repayments could be and get in on the remortgaging action.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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