Remortgage demand is continuing to grow as homeowners are seeking security away from their lender’s risky standard variable rate (SVR).  With warnings about the possible increase by the Bank of England of the standard base rate sometime next year, many homeowners are looking to fixed rates.  Increases in equity levels due to rising house prices are allowing more homeowners to withdraw cash with their remortgage deals.  These factors as well as the increase in consumer confidence are all attributing to rising remortgage demand.

Homeowners have come out in larger numbers to get remortgages but still not at levels seen before the recession began.  According to the Council of Mortgage Lenders, remortgage lending is up almost 20% on last year’s levels and the pace is growing each month. 

The demand is creating a lending environment that could see lenders pulling their cheapest remortgages off the table.  Despite the Bank of England allowing the standard base rate to remain at 0.5% for perhaps another 12 months, it does not insure lenders will do the same.  Lenders have other factors at play that can cause them to withdraw the remortgage deals they are offering. 

Experts warn that homeowners should beware of what an increase in rates could do to their budget.  While many standard variable rates are currently low, a minor increase could make an affordable mortgage turn into a budget killer.  Since lenders can raise SVRs without warning, sitting on the lender’s rate rather than grabbing a remortgage while offers are historically low could be a financial risk not worth taking.