With property prices continuing to rise and talk of a potential interest rate increase (or several) not going away, now is a good time to think about remortgaging.
The Bank of England reported this week that approvals for remortgaging with another lender (as opposed to staying with your existing lender and moving onto another deal), rose to 41,600 in October. This is low compared to the 12-month average of 49,100 but the busiest since March 2020 (42,700).
The rise in remortgage activity comes as a record number of mortgages are set to mature in coming months. And with inflation soaring to twice the Bank of England’s 2 per cent target, an interest rate rise could come at some point. If not at the December meeting, then when the committee meets again in February. Mortgages are only going to get more expensive.
While some deals have been priced upwards, particularly on the lowest loan-to-values (LTVs), the good news is that they are still remarkably cheap. While the sub-1 per cent fixed-rate mortgages have all but disappeared, two- and five-year fixes are still available from less than 1.5 per cent, so there are plenty of attractive options for those coming to the end of their current deal.
Rising property values can also make remortgaging more attractive. Homeowners may find that they are able to get a lower LTV mortgage to increase value in their property. Enabling them to get a cheaper mortgage rate even though the general direction of rates is upwards.
Many borrowers are also taking the opportunity to increase their mortgage when they refinance. Also, raising money to pay for home improvements. With the experience of lockdown still fresh in many minds. Being able to extend or create more space remains an attractive option.
Those considering remortgaging and/or extending their existing borrowing should seek advice from a whole-of-market broker such as AWS Private Finance. We compare all the deals on the market to find the right deal for your circumstances. Please get in touch for more information.