According to the Bank of England, remortgaging declined in 2020 in comparison with the previous year. The 2020 volume was 451,400 while in 2019 the volume was 587,600. The comparison of the start of the year versus the end of the year revealed that homeowners were passing over the opportunities for saving money. It could be that with the stress brought about by the pandemic, it was easier at the end of homeowner’s mortgage term to allow the lender to put them on their standard variable rate (SVR), but that ease could be costing them a substantial amount of money.

The housing market has desperately needed homes to be listed by sellers. Demand from hopeful home buyers has far outweighed properties coming onto the market. Now, with a third lockdown, the heightened threat of the global pandemic has pushed the imbalance even farther. According to the current house price index released by Zoopla, the flow of new homes coming available on the housing market in the first few weeks of 2021 is 12% lower than the level of new homes coming onto the market twelve months prior.

Homeowners are expected to show strong demand for remortgaging in the coming year. With low interest rates available, homeowners keen to save money will keep an eye on opportunity as it arrives at the end of their current mortgage term. Rather than pay more than needed on their monthly repayments, a remortgage could offer substantial savings for the term of a fixed rate deal, and studies have shown that a remortgage could save with a low interest rate half of what might be found on a lender’s standard variable rate (SVR) should they choose not to remortgage.

According to a recent research study, homeowners are missing out on the savings and benefits of remortgaging. The reasons are many, but unfortunately for some it is a matter of holding on to misinformation. It was determined that for those homeowners who chose to not remortgage at the end of their mortgage term and were then moved to their lender’s standard variable rate (SVR) they could save an average of £4,080 per year with a remortgage.

The pandemic impacted the UK housing market in 2020, but unlike what was expected with a dramatic slowdown, the market proved to be resilient. The lockdowns and need to spend more time at home made individuals and families reevaluate their dwellings. The home now had to be more than a place to contain our belongings and sleep. It became where we worked, our children studied, it became our gym, our place to worship and meditate, and where we sought entertainment through online streaming of films and game nights. For many, the new need meant finding a different place that could make all of that more possible and comfortable and as a result the housing market became busy.

It is not surprising that homeowners sought out remortgages in 2020. The interest rates were low and offered savings for those that chose to get a deal when their mortgage term ended. Rather than pay more than necessary when being moved to the lender’s standard variable rate (SVR), homeowners shopped for remortgages and took advantage of the benefits available. Lower interest rates could save money, a fixed interest rate could lock in the savings for months or years, and for those that wanted to cash out their built up equity, it could put money into hand during the pandemic.