Homeowners who were able to fix their mortgage into a two-year deal in October 2017, when mortgage rates were at a historic low, should consider taking advantage of the current competitive remortgage rates to avoid repayments at substantially higher standard variable rates (SVRs).
Data released by the Moneyfacts UK Mortgage Trends Treasury report shows that in October 2017, two year fixed mortgage rates were at a historic low, at an average of 2.20%. Homeowners who were able to lock their rate into a deal at that time have benefited from low mortgage repayments, especially as the average rate jumped to 2.33% a month later when the Bank of England increased the base rate from 0.25% to 0.50% in November 2017.
With the two year fixed rate deals taken out in October 2017 now coming to an end, homeowners should look at remortgaging, or else they will have to make repayments at their mortgage lender’s SVR, which with the average SVR rate at 4.90% in October 2019, is substantially higher than locking into a new fixed deal.
Darren Cook, finance expert at Moneyfacts.co.uk, explains: “Just over two years ago, the mortgage market reached the end of a period of aggressive competition, which saw the average two year fixed mortgage rate fall to its historical low of 2.20% in October 2017. Borrowers who took advantage of this increased competition between lenders before the base rate rise in November 2017 may have seen a difference of 2.70% between their previous fixed rate and last month’s average SVR (4.90%).”
