Analysis by Yorkshire Building Society indicates homeowners looking to remortgage could see their monthly repayments fall thanks to reduced mortgage rates and increased house prices benefiting their mortgage loan-to-value (LTV).
As an example, a London homeowner who initially borrowed 90% of a £250,000 property in July 2015 at a market average rate of 3.60% could now benefit from a reduced LTV of 72% when taking out a mortgage in July 2017 after house prices in the area increased by 14.9% during the two-year period. Switching to the Yorkshire’s current two-year fix of 1.14% for borrowers with a 75% LTV could save £255 a month in repayments, a total of more than £3,000 a year.
Charles Mungroo, Mortgage Manager at Yorkshire Building Society, said: “With such a large proportion of mortgage deals coming to an end in September and October we expect to see a surge in remortgages soon.
Homeowners should be planning ahead long before their fixed period ends to ensure they get the best option. Longer term fixes may appeal to borrowers who want to keep their monthly repayments as low as possible whilst also being able to budget for the next five years. All our mortgage offers are valid for six months so customers have reassurance that they’ve secured a great rate but they also have some breathing space if they have other priorities at the moment, such as a summer holiday.”
