Value of remortgage lending went up in September to £4.4 billion.  This is a 19% increase from the £3.7 billion reported by the Council for Mortgage Lenders (CML).  According to another report, remortgage was at its highest level since the same month last year.  It is thought that the competitive environment of lenders bringing out lower interest rates to attract borrowing homeowners is the reason behind the increase.

Remortgage demand, while higher in September, has still failed to reflect the expectation that demand would grow strongly for new remortgage deals.  There are many homeowners that are currently paying their mortgage debt while it is tied to their lender’s standard variable rate (SVR).  When a homeowner does not seek a remortgage at the end of their current mortgage deal the debt is moved to the lender’s SVR which is risky as it can increase with little notice and have a homeowner facing unexpected larger repayments.  An SVR is usually only a choice for those that can handle interest rate changes that occur quickly without any hardship to their household budget.

Yet, for those that need a steady repayment amount and look to save money and lock in a low interest rate for years, remortgage deals are very attractive currently.  As stated earlier, lenders have been vying for the attention of borrowers and have brought out very cheap remortgage deals.  This trend will not last forever and one day can see them pulled and replaced with higher interest rates.  The homeowner that needs or wants a remortgage with a low interest rate should shop around soon before remortgage demand increases more and lenders are not enticing borrowers with low interest rates and well packaged remortgage products.