This autumn will see an impressive £35 billion worth of mortgages reach maturity. If you're one of these homeowners coming to the end of a deal, you could see your monthly repayments fall substantially if you remortgage, thanks to reduced mortgage rates and increased house prices. So, what are you waiting for?
The data, from CACI, shows that approximately £17 billion worth of mortgages are due to mature in September, with another £18 billion due in October, marking the biggest two-month maturity period since 2012.
Additional research from Yorkshire Building Society shows that one of the main ways in which those maturing will be able to benefit is by taking advantage of the continued rise in house prices. They use as an example a London homeowner who initially borrowed 90% of a £250,000 property in July 2015 at a market average rate of 3.60%. This person could now benefit from a reduced loan-to-value of 72% when taking out a mortgage in July 2017, since house prices in the area have increased by 14.9% during the two-year period.
Our own figures show that those who choose to remortgage in September could benefit from lower rates as well, as the average two-year fixed mortgage rate in September 2015 stood at 2.72%, compared with a current average two-year fixed rate of 2.24%. In contrast, if they simply revert to their lender's Standard Variable Rate (SVR), they could see a whopping increase of 1.88% in their mortgage rate, given that the average SVR stands at 4.60%.
"Mortgage rates have fallen, so borrowers who decide to switch to a more competitive rate will notice the benefit immediately by their lower monthly repayments," said Rachel Springall, finance expert at moneyfacts.co.uk. "Borrowers who come off an average SVR of 4.60% today and switch to the average five-year fixed rate of 2.80% would save £146.48 a month on their repayments [based on a mortgage of £150,000 over 25 years] - cash that could be put to better use considering the rising cost of living."
As you can see, even those reaching the end of their fixed rate mortgage deal before September will be able to take advantage of lower repayments. Indeed, statistics from the LMS show that 21% of remortgagors have managed to lower their overall mortgage payments in June, an increase from 15% in May and the highest percentage since December 2016.
Additionally, an impressive 84% managed to lower their mortgage rate in June, up from 82% of remortgagors who managed to do so in May. The number of people remortgaging also increased, reflecting the fact that competition is still very much alive and well in the mortgage market. Indeed, it's thought that competition has intensified in recent months, with several lenders now offering two-year fixed deals at a record low of 0.99%.
Charles Mungroo, mortgage manager at Yorkshire Building Society, commented: "Homeowners should be planning ahead long before their fixed period ends to ensure they get the best option. Longer term fixes may appeal to borrowers who want to keep their monthly repayments as low as possible whilst also being able to budget for the next five years."
So, regardless of if your mortgage is maturing now or in the autumn, it's time to see what is out there and try to find a better deal. Our mortgage Best Buy charts should give you a good idea of what you could save, considering these top rates will be even lower than the averages mentioned above.
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.