In September, 85% of those homeowners looking to remortgage their properties were able to achieve lower rates, and almost two thirds of those who did remortgage plan to do so again in the next four years, so as to take advantage of record low rates.
The findings come from new research carried out by LMS, the conveyancing panel management specialists, who have reported that 64% of homeowners who remortgaged in September plan to do so again in the next four years, while only 12% plan to wait more than eight years to remortgage.
LMS also found the 62% of remortgagors did so because their current deal was due to expire and that 14% of remortgagors believe that interest rates will increase next year, despite commentary to the contrary. Less than one in ten surveyed believe rates will drop further in the next year.
Product preference was also examined in the LMS survey, revealing that 46% of remortgagors changed the type of their mortgage to suit current financial situations and expectations.
Meanwhile, 38% of those remortgaging were doing so following the end of a two-year mortgage deal.
Similarly, 26% chose a two-year mortgage product for their new deal.
In contrast, only 8% of remortagors were on a five-year deal before remortgaging, while 22% chose this option as their deal going forward.
While five-year deals are generally more expensive than two-year fixed deals, the LMS interprets this as “anecdotal evidence that, in the current environment of political and economic uncertainty, people are looking for longer-term security even if this involves slightly higher costs in the short-term.”
Andy Knee, chief executive, LMS, said:
“Record-low mortgage rates after the cut to the base interest rate make this a great time to remortgage. Mortgage interest rates were already falling but this cut may have been the catalyst to encourage more people to remortgage – August had the highest number of remortgages for seven years, after the base rate was cut.”
You may also be interested in:
Steve gives his views on what the implications of tougher interest cover ratios and increased background checks will mean for landlords and buy to let lenders.