Remortgage market at ten year high – but it’s not just Brexit
UK Finance data shows that UK remortgaging has reached it’s highest level in almost a decade.
Mortgage experts suggest that uncertainty caused by Brexit has encouraged homeowners to seek financial security and remortgage sooner rather than later. In October, £9.2bn remortgage loans were approved for homeowners, the highest monthly total since November 2008. This was matched by the total number of remortgage loans at 50,500 – the largest amount since 2008.
Ending deals boost market
However, it’s not just Brexit impacting the market. There was a surge in two-year fixed rate deals secured in 2016, which has naturally resulted in a boom of remortgaging activity this year as they came to an end. According to UK Finance, another boost in activity is expected between April and June in 2019 as another tranche of fixed deals finish.
Remortgage assistance 30,000 mortgage prisoners
In May, the Financial Conduct Authority pledged to help the 30,000 mortgage prisoners, with lenders authorised to offer mortgage products, that were told they couldn’t afford to remortgage – despite a remortgage deal costing them less than their current mortgage payments. As a result, 59 lenders agreed to help existing borrowers on reversion rates access new deals and remortgage their homes.
Rising interest rates
Rising interest rates have spurred homeowners into action to safeguard their finances from future increases, and with industry experts predicting another Bank of England rate rise in February 2019, we could see another surge of remortgage activity in January from homeowners.
Lenders switch focus
A shrinking new home loan market has seen lenders switch their focus to existing homeowners to meet their loan targets. The increasingly competitive market has seen lenders reduce rates and offer significant incentives to attract remortgaging customers this year.
As speculation over the impact of Brexit on mortgages continues, lenders will be relying on homeowners wanting to play it safe by locking in to five and ten year fixed rate deals to ride the storm. The good news for borrowers is that competition will remain intense amongst lenders and securing a low rate deal looks set to be likely now and into the new year.
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