According to UK Finance, in October 2018 the level of remortgaging has hit its highest level for nearly ten years. The fact that the remortgage market is so buoyant is great news for homeowners.
Driven by competition between lenders, around 50,500 homeowners switched their loan during one month, a 23% rise on the same time last year. This resulted in a total of £9.2bn advanced.
This has been driven by uncertainty prompting homeowners to switch loans, and a whole host of competitive eats on offer as banks were looking to meet their lending targets. This year is thought to be particularly busy given that a large number of people are coming to the end of their two-year fixed rate mortgage deal. In addition, homeowners wanted to take advantage of cheap rates and the expectation that interest rates will rise again next year, as well as the high cost of standard variable rate mortgages compared with new fixed rate loans are motivating homeowners to lock into a new deal sooner rather than later. There was also a jump in the number of landlords remortgaging, with this rising by 5% year-on-year as landlords are trying to maximise the returns they can make on their property given the recent tax changes.
Competition is expected to remain strong for some time, with new lenders coming into the market and existing ones keen to expand their market share and with property transactions continuing to be subdued, the competition is pitched at those looking to remortgage.
Lending to home movers was ahead by only 4% compared to the same time last year, as potential buyers are thought to be waiting out the Brexit negotiations. Lending to first time buyers was 12% higher during October than it was a year go, with a total of £5.5bn advanced.
The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.