The number of mortgages approved saw a definite uptick in December, official figures from the Bank of England reveal, but there's one clear sector that's driving the increase – remortgaging.
The seasonally-adjusted figures show that 124,803 mortgages were approved in December, a notable rise from the 121,818 in November, with the bulk of this increase coming from the remortgaging sector: the number of remortgage approvals totalled 41,708 in the month, well above the 39,374 figure seen in November, and significantly, the highest monthly remortgage total seen since the financial crisis.
The figure for October 2008 stood at 73,433 and dropped dramatically from then onwards – the total fell to 40,163 in November 2008 – as the full effects of the recession took hold. Now, the tables have begun to turn, with remortgaging activity being on a general upwards trajectory for much of the last year.
Given the level of positivity in the mortgage market at the moment, it's little wonder that so many people are choosing to remortgage! Average rates are still at historic lows and product availability has increased dramatically in recent years, and our own figures have highlighted the potential benefits of remortgaging – and provide an explanation for the growing amount of activity in the sector.
The data shows that the average two-year fixed mortgage rate stood at 2.56% in January this year, while the average standard variable rate (SVR) currently stands at 4.81%. Meanwhile, the average two-year mortgage rate of January 2014 stood at 3.43%, which means that those who are now coming to the end of a fixed rate term are faced with the option of reverting to their lender's SVR – which would leave them with a rate that's 1.38% higher – or remortgage to a new fixed rate deal, which could result in a rate reduction of 0.87%. It's a no-brainer!
If you're coming to the end of a fixed rate term, or if you're currently sitting on your lender's SVR, the time has definitely come to consider remortgaging. The figures speak for themselves, and these are just averages, too: rates start from as low as 1.49% for those seeking a two-year fixed deal at 65% loan-to-value, so if you've built up a decent amount of equity in your home, you could truly benefit. Check out our top fixed rate and remortgage deals to get started, and see why so many people are remortgaging.
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 Any products featured may be withdrawn by their provider or changed at any time.