When a homeowner’s mortgage term is about to end they have to make a choice as they once did when they acquired the loan. The term ending brings about the opportunity to again choose a deal. They may remortgage and choose from the many products available from brokers or lenders, or they may choose to not remortgage and be moved to their lender’s standard variable rate or SVR. The choice to remortgage or to not remortgage has its own advantages, and experts agree that now with interest rates so low, remortgaging could be the very best choice.

Last week the Bank of England’s Monetary Policy Committee (MPC) voted unanimously to keep the standard base interest rate at the historic low of 0.1%. In historic, it means in over 300 years the rate has not been lower. It was expected that the MPC would keep rates steady, despite the continued impact of the pandemic on the economy. Covid-19 vaccines are being distributed and that is expected to raise confidence as well as allow businesses and people in general to move back toward a more stable lifestyle and support the economy.

Homeowners are starting to look toward remortgaging more and more. The ability to secure a lower interest rate than what they were previously paying on their mortgage or perhaps cut the interest rate by almost half compared to a standard variable rate (SVR) of a lender after a mortgage term ends could offer some relief to one’s household budget. According to a recent report, most homeowners are looking to secure a low interest rate for years ahead and are focusing on five year remortgage deals.

Homeowners have not been keen to remortgage. Many allowed their mortgage term to end and found a lower interest rate when moved to their lender’s standard variable rate (SVR). While the lender’s SVR could be lower than the rate the homeowner was used to paying with their mortgage deal, they could be paying double or more than what they would pay with a remortgage interest rate. Rather than pay more than necessary, and rather than face the risk of rising rates, seeking a remortgage could be the smartest move in the midst of our uncertain economy.

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.