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.

Home buyers might find themselves facing an unexpected tax bill according to experts as the end of the stamp duty is set to expire the end of March. Approximately 100,000 home buyers are facing delays that could put them past the deadline and therefore facing an expenditure they were trying to avoid. It is unknown at this time if the holiday will be extended. The tax relief has helped in boosting interest in the housing market and without it a lull in the built up momentum of home buyers will surely occur.

Homeowners that have their mortgage deal end and do not remortgage are moved to their lender’s standard variable rate or SVR. The lender’s SVR could actually help the homeowner if it is a lower interest rate than what the homeowner was used to pay on their mortgage term. However, the SVR can be risky to a household budget that cannot handle a fluctuating rise in their interest rate. That is why most homeowners will seek a fixed interest rate remortgage so that they lock in a low rate rather than facing a possible rate increase.