The number of remortgages has hit figures not seen in more than 3 years as the Bank of England is closing in on potentially raising the base rate from the 0.5% level it has been sitting at for many years.  House owners are taking into account the possibility of interest rates rising which will lead to higher monthly mortgage payments.  This concern has led to fewer people actually looking for other residences and turned their focus to improving their current condition through finding a sweeter mortgage deal and remortgaging.

The attention to the possibilities which exist through a remortgage have doubled the amount of searches taking place for remortgage information.  Conversely, remortgages were only the focus of 26% of the searches in the second quarter of last year.

Brian Murphy, head of lending at Mortgage Advice Bureau, commented on the current state of the remortgage market, saying: “Remortgage lending may have been subdued in recent months, but these figures suggest there is a sizable swell of enthusiasm building up that is likely to break through as the year progresses and the inevitable rate rise approaches.

“Many existing owners have been sitting pretty with exceptionally low interest payments thanks to the 0.5% base rate.

“This won’t change overnight with incremental increases on the cards – but the prospect of a rate change makes it worth revisiting the decision to stick or twist with your existing mortgage.

“In some cases, the cost of an early exit fee or early repayment charge on a fixed-term deal can be outweighed by the benefit of a better rate.

“Personal circumstances will dictate whether it’s worth exiting early and locking into another rate or simply waiting it out with limited rises on the horizon.”

Murphy added: “It pays to seek advice about the option that best suits your needs, which also applies to potential new borrowers hoping to spread their repayments.

“Longer mortgage terms can lessen the impact of rising prices on affordability, but one question you need to ask is whether the short-term gain of lower payments is worth the long-term pain of a bigger total bill.

“There are also age- and income-related criteria that apply if you want a mortgage term that reaches into your retirement, and advisers can help to explain the requirements that different lenders have.”