Remortgage Lending Declines Slightly in June
Homeowners have been seeking remortgages in the lead up to Brexit. Of those remortgages, fixed rates are the most popular according to numerous reports. UK Finance reported that those remortgaging for only their outstanding balance on their loan declined in volume in comparison to those doing the same last year. There was an increase in the number of homeowners that chose to remortgage with additional borrowing.
Remortgages with additional borrowing, the one area of remortgaging that grew in June, rose to 16,880 at an increase of 8.3%. The average additional amount borrowed in June amounted to £56,100. The report revealed 15,320 remortgages without additional borrowing.
Mortgage lending was in demand with 32,760 first time buyers completing in June 2019. There were 31,000 home movers.
Buy to let mortgages declined year on year by 3.6% to 5,3000 and the landlords remortgaged in lower volume than last year by 0.8% to only 12,500.
There is an expectation for the next few months to show an increase in remortgage lending due to the fact that many mortgages are going to be ending their term. In fact, in the same month as the Brexit deadline which is 31 October, a high number of homeowners will have their terms end and will either need to remortgage or their lender will move them to their standard variable rate (SVR). Experts warn that SVRs could be double or more the interest rate that homeowners are used to paying if they mortgaged or remortgaged two or more years ago.