Incentive to Remortgage at Level not Seen in a Decade

Incentive to Remortgage at Level not Seen in a Decade

Recently released UK housing market data indicates incentive for remortgage is at a level not seen in more than a decade. The mortgage lending tool could now be an answer to many house owners looking for a way to save money. According to data from Moneyfacts, incentive to remortgage is due to the rate at which house owners could be moving onto after their initial mortgage matures. In many cases, mortgage holders could be looking at a rate which is twice that of their original rate with their lender SVR.

The initial mortgage loan of mortgage loans obtained in 2017 was on average 2.31%. The loan average of lender SVRs now sits at 4.9%. That is a difference of 2.6%. House owners with goals including saving money are urged not to allow the transition to the lender SVR to take place. It means spending more each month and financially moving in the opposite direction.

Based on average mortgage lending amounts, this could lead to a house owner spending more than £275 on a mortgage payment each month. Collectively, that is an increase of more than £3,300 per year on the mortgage.

Interest rates play a critical role in the amount of the monthly mortgage payment. Just a slight increase or decrease can lead to vast changes in the monthly bill. For that reason, house owners must stay in touch with interest rates and impact from the change.

Housing experts see this time as quite a period for house owners to capitalise on what the market has to offer in the way of opportunities for a lower interest rate through remortgage.

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