Lloyds figures suggest in the last 12 months, the average SVR has become 0.18% more expensive than the average fixed rate, with the average fix at 3.95% against the average SVR at 4.13%.
However, remortgage volumes have fallen by 75% since 2007, despite the fact fixed rate mortgages have also fallen by 164 basis points over the last five years.
Research showed just 10% of borrowers would look to change deals if they saw an increase in their monthly payments of between £25 and £50. Equally, 13% of respondents said their monthly payment would need to go up by £100 before they would consider switching to a fixed deal and 8% of borrowers say that they would only consider switching products if their monthly payments doubled.
Halifax said the benefits of remortgaging need to be more marked to push borrowers to make a move.
Stephen Noakes, mortgage director at Halifax, said: “The remortgage market has been slower since 2008, and with SVRs at historically low levels it’s easy to understand why. In today’s market significant numbers of borrowers feel the right decision is to remain on a Standard Variable Rate, a very different decision to the historical norm where customers who stayed put and didn’t remortgage saw a sizeable increase in their monthly payment.
“Over the last few months, SVRs have gone up and fixed rates have come down, but as our customer research shows, borrowers are only willing to consider remortgaging if it means their monthly payments become significantly cheaper. This attitude has fundamentally changed the demand for remortgaging in today’s market and points to the reason for remortgage levels being at historical lows.”
In the second half of 2007, remortgage activity accounted for half of all lending, rising to 64% in 2008, where activity is at 39% in 2012.
