Thinking of remortgaging? You're picking a great time to do it, because not only can you benefit from more products on the market, but rates are lower than they have been in years.
Remortgaging activity on the rise
Our latest figures show that there are now 2,402 products available to remortgage customers, an increase of 317 on an annual basis and notably higher than the 1,676 remortgage products recorded in September 2010, when the market was still feeling the effects of the financial crisis.
At the same time, average rates have fallen, with the average two-year remortgage rate now standing at 2.57%, down 0.88% from this time last year and a significant drop of 1.82% from 2010, when the average rate stood at 4.39%. It's a similar story in the five-year sector, and in fact, you can now get a five-year rate that's cheaper than the typical two-year rate in 2010.
The table below highlights the changes in more detail, and as you can see, the improvement is marked. It's little wonder that remortgage activity has surged to its highest level in four years (according to the British Bankers' Association), as it looks as though there's been no better time to take advantage of the deals on offer.
"It seems that now is the perfect time to remortgage; growing product numbers and falling rates have created a perfect storm in the remortgage market, and borrowers are rushing to take advantage," said Charlotte Nelson, finance expert at Moneyfacts.
"Some rates have witnessed particularly dramatic reductions since the beginning of this year: the average two-year fixed mortgage for remortgage customers has fallen by an astonishing 0.39% in just six months, for example, which just shows how quickly the market has improved for borrowers."
It could save you money!
We've talked a fair bit about the motivation to remortgage in recent months, and that motivation is only growing. As Charlotte points out, with the average Standard Variable Rate (SVR) standing at 4.82% today, it's unsurprising that more and more consumers are remortgaging to a better deal: by switching to the average two-year fixed rate mortgage, rather than staying on the SVR, our calculations show that customers can potentially save £2,196 in just one year.
"Many deals are also now offering the option to make overpayments, which if taken advantage of, can benefit remortgage customers even more," added Charlotte. "Wise remortgagors could use the money saved from changing deals to overpay their mortgage, thereby reducing the length of their mortgage term.
"However, with the Mortgage Market Review now firmly entrenched in bank policy, some remortgage customers will be shocked by the changes in the mortgage process. But as long as remortgagors get their finances in order, there is nothing to worry about."
So, if you're considering remortgaging to a low-cost deal, act now to avoid disappointment. Rates are already starting to edge up, so make sure you start the process as soon as possible, as these attractive deals won't be around forever.
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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