Remortgaging up 53% year-on-year
The figures come despite the seasonal fall, which saw re-mortgaging activity in October drop 21% on September.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “Remortgaging is roaring ahead this year. Those looking for cheaper rates have likely been tempted to take advantage of the rock-bottom interest rates while they last.”
Figures released by HSBC show homeowners on a lender’s Standard Variable Rate (SVR) mortgage could be paying an average of £4,000 a year more than they need to compared to what they would pay if they fixed their mortgage now.
HSBC’s statistics revealed almost two million borrowers were on an SVR above 3%. By remortgaging, these borrowers could save as much as £15,000 over a five-year fixed deal. One month’s worth of savings could pay for five weeks of food shopping, calculated at an average £58.80 per week, said the lender.
Tracie Pearce, head of mortgages at HSBC, said a quick call to a borrower’s lender will allow them to know if they are on a SVR mortgage, and can help them save ‘a small fortune’ by switching to a more competitive product before interest rates ‘inevitably’ go up.
Many borrowers are also taking the opportunity to remortgage in order to release equity and upgrade their house, Bagshaw said, with low interest rates making it easier for home movers to climb the property ladder.
Connells also reported a 25% growth in buy-to-let valuations between October this year and the same time last year, while first-time buyer valuations increased by 20% over the same period.
John Bagshaw said: “The buy-to-let sector continues to thrive, albeit at a steadier pace than in previous months. The fundamentals of its profitability have remained intact. Demand for housing still exceeds supply and very low mortgage rates remain in abundance.
“Moreover, the Bank of England aoounced recently that any rate rise is off the cards for the immediate future, meaning the field is still open for many more investors to acquire a portfolio and become a new landlord.”