Remortgaging a big hit in 2017
Low interest rates coupled with the possibility to reducing monthly mortgage repayments has prompted a remortgage surge in early 2017. Activity climbed to represent 21% of the total valuations market in March, from 15% year-on-year. These figures also show that March remortgage activity was at its highest level for five years.
A good start to the year
This data follows an already strong beginning to 2017. The number of people remortgaging in February was at an eight-year high at almost 44,000, which is also a 35% increase year-on-year. This early upsurge was mostly down to lower rates offered by lenders, to entice borrowers away from their variable rate and possibly reduce their monthly outgoings. Data shows that the best rates on five-year fixes have fallen below 2%, with the best two-year deals on cases for vanilla borrowers with high deposits around 1%.
As well as low rates, there are other factors that can contribute to an increase in remortgage activity. As inflation hit its highest level since September 2013, some experts believe homeowners looked to offset an increase in the cost of living. Household finances are often finely balanced and more costly goods such as food and clothing can see people looking to save money elsewhere.
The rest of the year ahead
Despite the increase in remortgagors, affordability tightened. In January 2017, the mortgage repayment as a percentage of total income climbed month-on-month from 16.9% to 17.8%. Some see this as a sign of things to come and are keen to lock into a low fixed rate early, whilst others are more cautious. According to data, half of those remortgaging feel that rates will likely rise over the next 12 months, which has seen some homeowners prepared to wait longer before remortgaging again.
If you would like to discuss your remortgage options and review your finances with us, contact our advisers today to arrange a meeting.