Homeowner demand for remortgages appeared to wane between July and August. According to remortgage data released from LMS instruction volumes fell by 31%. The month to month comparison for completions declined by 14%. Of those that did remortgage, 42% increased the size of their loans in August.
Homeowners are looking toward remortgages for many reasons. The most common reason is to save money. No one wants to be putting more money out to their mortgage repayments than necessary. If there is a lower interest rate available, it makes sense to change and have savings every month.
The novel coronavirus pandemic has had a major impact on the mental health of consumers. Not only is there anxiety over the illness in general, but also the safety of oneself and their family and friends. In addition to the worries over health concerns, there is the financial stress as well due to the pandemic. According to a recent survey, one group is finding some relief and peace of mind from the financial anxiety, and that group is homeowners remortgaging.
In March, in response to the coronavirus pandemic and its impact on consumers and the economy, the Bank of England’s Monetary Policy Committee (MPC) met twice to specifically address the cost of borrowing. The result was the all-time historic low level of the Bank’s standard base rate to 0.1%. This marked an over 300 year low. No doubt, there was going to be deals offered by lenders that would allow substantial savings in remortgaging.
The pandemic has not diluted the dream of being a homeowner. If anything, it has pushed for the dream to be stronger as people are forced to be at home more. According to a recent study by the Royal Institute of Chartered Surveyors (RICS), due to lower interest rates and stamp duty cuts the demand for property is growing and homes with gardens are in strong demand. In fact, the desire to purchase a home has pushed confidence in the housing market to a four year high.
Homeowners could have an opportunity to save money and put more cash flow into their monthly budget. There are many low interest rate deals that are attractive and for some could offer a substantial savings. It has been stated by experts that homeowners should review their current mortgage deal and if it is ready to end to start shopping around soon for the best deal. Those that have already had their deal end are especially encouraged to seek out a remortgage, as their lender’s risky standard variable rate (SVR) could have them paying more money than they would have to with a remortgage.