Have you taken the plunge and remortgaged your home in the last six months? If so, you're not alone, with research from Yorkshire Building Society showing that remortgaging activity has almost doubled year-on-year, as borrowers rush to renew their mortgage deals while rates stay at historic lows.
Remortgage surge continuing
Remortgaging activity was already healthy in the run-up to summer, and the figures show that this has continued: the Society saw applications to remortgage rise by 94% in the six months to 30 November compared with the same period a year ago – an unexpected and highly unseasonal pattern – and looking on a monthly basis shows an even stronger level of activity.
September saw the biggest year-on-year upswing of remortgaging activity with applications up by 139%, while in October, the figure rose by 99%. In November, 125% more borrowers applied to remortgage than in the same month a year previously, with the rise representing a total increase in remortgage applications of 120% year-on-year in September, October and November.
Rate cuts fuelling the rise
Considering how low mortgage rates have been of late, it's no wonder that so many people have decided to reconsider their options. Our own figures show that average rates have fallen dramatically in recent months: the average two-year fixed remortgage rate stood at 2.83% at the beginning of June, but this fell by a significant 0.43% to 2.40% by the end of November.
The drop was even more marked for five-year fixed rates, with the average for remortgagors falling by an impressive 0.50%, down from 3.24% to 2.71% over the same period.
"Lenders are enthusiastic to retain borrowers but they also want to attract new business, [which means] there is now an abundance of mortgage options to suit different borrower types," said Rachel Springall, finance expert at Moneyfacts. "Some offer a generous incentive package while others come with a lower rate or fee, which means there is greater customer choice.
"However, it's important to remember that these low rates and vast quantity of deals will not be around forever and there is uncertainty as to when the market will change, so if borrowers are in a position to refinance, now is as good a time as any."
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