Data recently released by UK Finance reveals that homeowners are still very interested in escaping possible higher interest rates on their lender’s standard variable rates (SVR) as well as any possible Bank of England rate hikes in the near future by seeking remortgages. The number of remortgage borrowers increased by close to 20% in the year to year comparison for May 2018 and May 2019.
Homeowners have been consistently seeking to remortgage. It is no wonder because there are savings to be found. One of the most popular remortgage products among homeowners is a fixed rate remortgage. Such a rate will assure homeowners of the interest rate they will pay over the course of the term of the deal. In the uncertainty of Brexit, being safeguarded against rising rates can offer peace of mind to a homeowner.
Homeowners that have had their current remortgage deal end and those that are close are likely considering a remortgage. If they aren’t, they should be. Experts report that those that mortgaged with a fixed rate two or more years ago could find that not remortgaging will have them paying double or more the interest rate of their lender’s standard variable rate (SVR). To escape being moved to the lender’s SVR at the end of their mortgage deal a remortgage is the only answer.
The decision to remortgage has perhaps never been so confusing as to whether one is better off doing it or waiting it out. Could the interest rate increase soon and have you paying more than you need to? Could remortgaging then save you money and be the right decision? Perhaps because of Brexit, interest rates will be cut again and then that could have you missing out on what could be lower rates offered than what are available now? To remortgage or not to remortgage is the question that many homeowners can’t quite find the answer to and it seems it is getting even more confusing.
The housing market has in many reports shown resilience against the threat cast by the shadow of Brexit. Much of that resilience is thought to be fueled by the continued opportunity of homebuyers securing a low interest rate mortgage. While the current interest rates offered are not close to the historic lows of a few years ago, the levels are still well below that which was considered normal before the economic crisis.
Homeowners are being encouraged to consider a remortgage if they are close to having their current deal end. Without a remortgage, lenders will move a homeowner’s loan to their standard variable rate (SVR). According to reports, particularly one released by Moneyfacts.co.uk, it is reported that borrowers that mortgaged two or more years ago could face a SVR that is double or more the interest rate that the homeowner was used to paying.