Sceptic remortgagors continue to capitalise on low rates

Sceptic remortgagors continue to capitalise on low rates

A new report from LMS has revealed that the proportion of remortgagors who believe that interest rates will rise has decreased by three percentage points from 25% in December 2015 to 22% in January 2016.

Global economic uncertainty and the possibility of a Brexit in 2016 has delayed the likelihood of a base rate rise. The percentage of people now expecting a rate rise is therefore eight percentage points lower than in January 2015 last year, when nearly a third of people (30%) of people expected a rate rise.

However, this has not dissuaded homeowners from remortgaging or caused borrowers to become complacent. Almost two-thirds of people (65%) remortgaged to take advantage of lower interest rates.

Monthly gross remortgage lending rose to a seven-year high of £6.2bn in January 2016, a rise of 49% from £4.2bn in December 2015.

Savvy borrowers were also able to reduce their monthly outgoings. More than a third (36%) who remortgaged were able to reduce their payments by up to £500. A further 3% were able to reduce their monthly payments by more than £500.


Almost a third (29%) of remortgagors were able to increase the size of their loan, of which 72% increased the size by more than £10,000.

Other reasons to remortgage included paying off other debts, a factor that has fallen by four percentage points to 7% from 11% in December 2015 as financial pressures ease following Christmas. A small number of remortgagors also chose to release cash to help a child buy property (1%) while one in five opted to spend on home improvements (20%).

More than eight in ten (83%) people deciding to remortgage chose to switch lenders. There was a five percentage point rise from 41% in December to 46% in January 2016 in the number of people opting to use brokers or mortgage advisers in the remortgage process, as more borrowers saw the value of financial advice to help navigate them through the range of options.

Andy Knee, Chief Executive of LMS, comments: “With the looming possibility of a Brexit, and in the midst of global uncertainty and shaky markets, we’re seeing indications from the Bank of England of a base rate rise being pushed back further. Some have predicted a rise to be delayed until as far as 2019.

However, borrowers appear to be wiser, and are still remortgaging to reduce costs rather than becoming complacent. Remortgage lending rose by 49% to £6.2bn in January from £4.2bn in December and was also recorded as 45% higher than the same time last year. With the cost of a fixed-rate mortgage at historic lows, plummeting swap rates and so many great deals on the market, it’s never been a better time to lock into low interest rates.

It’s also encouraging to see borrowers taking greater control of their finances and seeking advice, especially at a time when many property investors in particular are hoping to complete their transactions before April tax changes come into effect.”

Join our mailing list:

Leave a comment



Latest Comments

ChristinaReedUK
ChristinaReedUK 20 Jun 2016

I don't understand why it's always a war between the two sides. Either, way the landlord is probably keeping a detailed inventory and will see the changes you've made. I just don't understand why there...

view article
NathanGreen
NathanGreen 16 Jun 2016

Seeing that the tenants are quite satisfied with their landlords and the properties is indeed great. I wonder, though, what is the situation in London alone? The tenants face sky-high rent levels in the...

view article
AndiMur
AndiMur 15 Jun 2016

TheGuardian published the same forecast. But on the other hand, professional brokers express different opinions. According totranio.com, an exit from the EU would not affect the demand/supply imbalance...

view article
Gary Holmes
Gary Holmes 14 Jun 2016

Having a professionally completed inventory at check-in and check-out is clearly (to me at least) of minor value. Tenants make un-authorised modifications and/or walk off with items that belong to the

view article
Violet Gibson
Violet Gibson 14 Jun 2016

Cautious people think buying off-plan is reckless, but over the past few years investors have literally made fortunes.Pre-release prices have obvious benefits for the developer, who gets instant finance...

view article
Kate Windleton
Kate Windleton 14 Jun 2016

An interesting research indeed. I guess that is in complete contrast with the United States where people often move from one coast to another. It will be interesting to hear the trends for people moving...

view article
NathanGreen
NathanGreen 14 Jun 2016

I think it all depends on the market conditions and how well your company is doing. You will agree that you can't demand more when you're killing yourself just to hang in there. Sometimes you need all

view article
ChristinaReedUK
ChristinaReedUK 13 Jun 2016

What does "detecting a bad vibe" mean actually. I've had certain vibes like these and yet have always found a reason , if there's any, why I don't like a certain property. The property maintenance might...

view article
keybanks estates
keybanks estates 08 Jun 2016

Great News for first time buyers, about time two!

view article
NathanGreen
NathanGreen 07 Jun 2016

I agree with #6 - you should maintain your garden according to the target buyer. One thing is universal, though - cleanliness and order. Having the yard clutter-free and clean will help people who do enjoy...

view article
NathanGreen
NathanGreen 06 Jun 2016

I will always say that London is overrated. Sure it is the capital, but it's too stuffed in there. It's more of a business city to me.

view article
Paul
Paul 25 May 2016

Estate agents are pathetic when it comes to fees. They have this 'I had to do it at 1% because that's what the others were quoting' mentality. We are the most expensive agents in our area, charging double...

view article

Related stories

More articles from Finance