Remortgage lending had been expected to boom once the warning was twice or thrice repeated that interest rates are due to rise.  However, despite the threat of higher costs in mortgage repayments for homeowners, remortgage demand has remained low.  This could play into the favor of those that have currently started to shop around for a new deal, as lenders intent on increasing business have lowered their remortgage deals to some of the lowest interest rate levels seen in years.

According to a remortgaging report from the Mortgage Advice Bureau, 2 million homeowners have remortgaged in the past five years, but 4.4 million homeowners have stayed with their current lender.  Unfortunately for many homeowners, the expected interest rate hike by the Bank of England expected in early 2015 will impact their household budget and cause hardship.  Those that are at the highest risk could be the ones that have had their mortgage deal end and now have their mortgage interest rate set to their lender’s standard variable rate (SVR).  Lenders can suddenly change their SVR and catch a homeowner off-guard with a higher mortgage repayment.

Remortgaging can take longer now than in the past to process due to the new guidelines set by the Mortgage Market Review.  More data is now collected by lenders of spending and saving habits of the borrower.  The intent is to reveal if the loan is affordable for the homeowner or homebuyer.  A stress test is also performed to determine if the loan will also be affordable when interest rates increase.

Due to the current low interest rate remortgage deals available, a homeowner looking to secure a low cost mortgage the choices will be many.  However, time is of the essence due to longer processing times and the expectation of lenders pulling their cheapest remortgage deals off of the market soon.