The remortgage market has enjoyed something of a resurgence in recent months, with record low mortgage rates encouraging homeowners to switch to a better deal and save money in the process. This pattern doesn't seem to be showing any sign of slowing down, either, with new figures from Connells Survey & Valuation showing that remortgaging activity has hit record levels.
The figures show that remortgaging was responsible for a record proportion of valuations in August, with this sector accounting for 37% of the valuations market, up from 34% at this point last year, as competition among lenders succeeds in attracting new borrowers. Many lenders are offering record low rates and borrowers are locking into them, in many cases securing long-term fixed rate deals for repayment security.
"Remortgaging is quickly becoming the dominant activity in the lending market," said John Bagshaw, corporate services director of Connells Survey & Valuation, "with the record high in August driven by consumers seeking out better-value borrowing."
Additional figures from UK Finance further show the boost in remortgaging activity, with the number of remortgage approvals hitting a seven-month high in August – a total of 27,768 remortgage approvals were granted in the month, up from 26,413 in July and the highest seen since January (27,942), highlighting just how many people are looking to take advantage of the market.
Much of this is being driven by mounting base rate speculation, with borrowers wanting to guard their repayments against a potential rate rise in the coming months.
"Having benefited from a decade of low interest rates, consumers are sensing the risk that this era is nearing an end," explained John. "Many older mortgage deals are expiring this autumn which will mean moving onto more expensive standard variable rates, [so] homeowners on these deals are instead opting to refinance, taking advantage of the intense competition in the mortgage market right now.
"With so much economic uncertainty and hints of a base rate rise, many are choosing to lock into a lower rate to see them through the next few years."
The ongoing rise in house prices is only adding to the potential benefit. Indeed, homeowners could find that their house price has improved so much that they're able to secure a better loan-to-value when remortgaging, potentially leading to an even lower mortgage rate and lower repayments as a result.
If you're approaching the end of your fixed rate mortgage term, or perhaps you're already on your lender's standard variable rate (SVR) and paying far too much for the privilege, now's the time to start considering your options.
After all, with the average two-year fixed mortgage rate currently standing at just 2.22% while the average SVR is 4.60%, why wouldn't you want to remortgage? Fixing to a lower rate deal could ensure repayment security for years to come, and you could easily lower your monthly payments in the process.
So join the ranks of remortgagors – check out the best remortgage rates by heading to our Best Buys, or use our mortgage search for a more personalised overview of the options available, and see how much you could save.
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